The present trends and macros surrounding the world’s flagship crypto Bitcoin suggest that there seem to be more than meets the eye. Nairametrics computed five major fundamentals that give the world’s most attractive crypto an edge that a good investor can’t afford to ignore.
1.The decline of Bitcoins on crypto exchanges is at a record low
When coins on spot exchanges drop, it’s a sign that new buyers are coming in to scoop coins off the markets and move them into cold storage HODL, and we are seeing new HODLers right now. Very macro bullish.
With so much demand, especially from institutional investors like Grayscale and Microstrategy, it might just be a matter of time for the world’s flagship crypto to jump the bullish wagon in the long term.
The decline of BTC exchange balances signals reduced selling pressure. In August 2020, 2.6 million BTC was being held on exchanges. This is significantly lower than the last time Bitcoin hit a local top a year ago (2.8 million), and lower than before the sell-off in March (2.9 million).
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2. The number of entities with a balance equal to or above 1000 BTC continues to rise
The signs are bullish, as we still haven’t broken the upward trend line, despite the dip at the start of September.
The number of #entities with a balance of >= 1k $BTC continues to increase. #Whales#Bullish as we still have not broken the upward trend line despite the dip during the start of September.#Bitcoin #Crypto
Source: @glassnode pic.twitter.com/ZXTnuk1N6v
— Double-U (@DoubleU_theory) September 14, 2020
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As BTC whales accumulate BTCs, Bitcoin’s circulating supply reduces, and this can weaken any bearish trend that BTC finds itself in. This means that over time, it’s possible that as Bitcoin approaches its fixed supply of 21 million coins, the price of BTC will go up, with BTC’s present demand factored in.
3. Many Bitcoin holders are refusing to sell
Recall that Nairametrics about two months ago, revealed how investors remain bullish in the long term, despite the blurred global economic outlook and resurgence of the COVID-19 virus.
The percentage of supply owned by entities holding ≤ 10 $BTC grew from 5.1% to 13.8% in 5 years, while the percent held by entities with 100-100k BTC declined from 62.9% to 49.8%.
These show that more retail investors are grabbing a stake in the most popular crypto asset, thereby diminishing the strength of BTC whales.
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4. Bitcoin has safe haven properties
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Bitcoin has a significant first-mover advantage, not only because it’s the first crypto as we know it, but because it was the first one with a gold-like store of value properties.
As such, it enjoys tremendous network effects (not dissimilar to those experienced by social networks like Facebook and Twitter) due to its vibrant community of users, developers, miners, exchanges, custodians, etc.
Nothing demonstrates this better than the fact that Bitcoin is an open-source project that can be copied or forked by anyone in the world at any moment. And yet despite being forked many times over the years, it remains the dominant crypto (store of value or otherwise) both in terms of market capitalization and liquidity. This race is Bitcoin’s to lose.
5. Public-listed global brands are using Bitcoin to hedge inflation
Some weeks back, MicroStrategy, a publicly-traded company based in America, adopted Bitcoin as a treasury reserve asset to hedge against fiat inflation. This is a big deal, as BTC is being used as intended – a hard money/savings instrument.
“Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.
“This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash,” he added.
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Disclaimer: The objective is to give the needed insight on the world’s most valuable crypto prevailing in the ever-changing global financial market. This should not be seen as a piece of investment advice or guide, as Nairametrics advises one to seek the services of a certified financial advisor for such.
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Readers should also note that the historical performances of this financial asset do not guarantee future performance. Therefore, Nairametrics doesn’t bear any responsibility for any trading loss you might incur as a result of using this data.