Blockchain analytics firm Chainalysis has published a report in which it says that only 3.5 million bitcoin, roughly 19% of the flagship cryptocurrency’s circulating supply, are actively being used for trading.
According to the report, around 20% of the bitcoins that have so far been mined are lost to dead addresses, has it has not moved for five years or more. Some of these addresses, however, belong to bitcoiners who simply have not moved their coins, as someone who mined BTC in 2009 and early 2010 recently signed messages calling out Craig Wright, proving he is both active and in control of the keys to those addresses.
The rest of the cryptocurrency’s circulating supply, around 60% of it, is being held as a long-term investment by cryptocurrency users that have not sold more than 25% of the BTC they have received. It’s worth noting that there are only 2.4 million BTC left to be mined.
The blockchain analytics firm identified 340,000 weekly active bitcoin traders, and found that so-called retail traders – those who moved less than $10,000 to exchanges at a time – were responsible for 96% of the 3.5 million bitcoin actively being traded.
Most inflows to cryptocurrency exchanges per week since 2018 were in increments between $10 and $1,000, as around 625,000 transactions of this size were made per week. Around 125,000 transactions per week were moving in increments between $1,000 and $10,000.
Professional traders, including institutional investors and cryptocurrency whales, represent roughly 14,200 out of the 340,00 weekly active traders, but are responsible “ for 85% of all the USD value of Bitcoin value sent to exchanges.” Chainalysis added:
Because of this, professional traders are the most significant contributors to large market movements, such as those seen during Bitcoin’s dramatic price decline in March as the Covid-19 crisis intensified in North America. However, professional traders are few in number, moving all that value in just 39,000 transfers per week on average in 2020.
Most of the funds held on an exchange, Chainalysis revealed, are held on some of the top cryptoassets trading platforms including Binance, Coinbase, and Bitfinex.
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