Holders of Over 11 Million Bitcoin are Proving That Hodl Is Not Just a Meme
- HODL is such a popular trading strategy in the crypto community that it has transcended into a meme.
- HODLers are flexing their muscles as they refuse to sell even if they are in profits.
- Add to that the halving and we have the recipe for bitcoin rocket fuel.
Many bitcoin traders laugh at the idea of HODL (holding on for dear life). They think that it is not a sound trading or investing strategy. If you buy and hold on the way down, it’s very likely that you’ll use the same approach on the way up. The rigidity of this method makes it difficult for many investors to lock in gains.
Nevertheless, the strategy is so popular that it has become a meme.
HODL’s acceptance appears to be bordering obsession. A new report reveals that millions of BTCs have not moved in a year.
Holders Refuse to Sell Even if They Are in Deep Profits
The S&P 500 is up nearly 27% year-to-date. If the index closes the year with gains around that number, then many investors would consider 2019 as a good year.
Bitcoin holders are also having a great year. The top cryptocurrency is by over 95% year-to-date. The numbers align. According to The Block, 61% of bitcoin holders are sitting in profits.
Even with gains that are over 250% higher than the S&P 500, there’s a sense that bitcoin investors are far from satisfied. Many expect mind-numbing and jaw-dropping performance from the dominant cryptocurrency.
I say this because BitInfoCharts show that 11.58 million BTCs have not moved in over a year.
In other words, 64% of the over 18.04 million bitcoin in circulation are not moving. This means that only 6.46 million BTCs are being used for speculation or payment settlement. At bitcoin’s current price of $7,260, only $48.99 billion worth of BTCs have been changing hands over the last year.
This has tremendous bullish implications for the number one cryptocurrency.
HODL Is Creating Immense Value for Bitcoin
Haters like Peter Schiff always claim that bitcoin has no intrinsic value. They say that unlike gold which can be used for electronics, bitcoin doesn’t have any utility. More importantly, it is not backed by anything that can prove its value.
Well, bitcoin’s value comes from its scarcity. There will only be 21 million BTCs in existence. On top of that, around 4 million BTCs are lost. The scarcity is real.
We spoke to Mati Greenspan, founder of Quantum Economics and asked whether 11.58 million being HODLed has long-term bull bullish implications. He told CCN,
The analyst then referred us to one of his recent tweets.
Trader Max echoes Mati Greenspan’s sentiments. The trader told CCN,
There are too many variables at play but scarcity is a good price driver.
The good news for HODLers is that bitcoin is about to get more scarce in the coming months.
Halving Very Likely to Make Bitcoin More Valuable
If analysts believe that scarcity drives the price of bitcoin, then it would be fair to assume that the top cryptocurrency’s value would soar in the coming months. In about six months, bitcoin block rewards will be reduced by half from 12.5 BTC down to 6.25 BTC. This means that there will only be around 900 BTCs issued to miners on a daily basis.
The dramatic drop in supply due to the halving would alleviate selling pressure at the very least. The reduction in selling is likely to drive prices higher. That might be more than enough to trigger a massive buying frenzy.
Therefore, HODL and halving are two of bitcoin’s strongest narratives.
Disclaimer: The above should not be considered trading advice from CCN. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
This article was edited by Sam Bourgi.