Just recently, we remarked on Bitcoin’s positive reaction to weakness in the U.S. banking sector. We said that, potentially, Bitcoin started to show the first signs of maturing as an asset Furthermore, we said that we would pay very close attention to its price action during the banking earnings season. Intriguingly, Bitcoin started to drop with solid earnings from major banks (marking the top above 31 000$ on the same day as JPM, C, and WFC reported their earnings). However, a few days later, it started to show signs of strength as regional banks (mainly First Republic Bank) revealed persisting problems in the industry (followed by FRC shares dropping more than 49% on 25th April 2023 and another 29% yesterday).
In the same time span, Bitcoin rebounded from 26 931$ back to 30 000$. As this raises more questions about Bitcoin maturing as an asset (and becoming what it was intended to be), we think it is important to look at Bitcoin addresses to determine whether this might be only a temporary shift or a lasting trend. For this purpose, we will focus on a period starting in November 2022, which marked the 2022 lows for Bitcoin and coincided with a big expansion of Bitcoin addresses.
Addresses with balances of more than 0.01 BTC, 0.1 BTC, and 1 BTC (first category - small investors)
Based on the information obtained from LookIntoBitcoin, Bitcoin addresses with more than 0.01 BTC in the balance stood at 10 816 039 on 1st November 2022. This figure rose to 11 774 869 on 25th April 2023, marking an increase of 8.8% (accounting for a 2% increase from 1st March 2023 until 25th April 2023).
Addresses with more than 0.1 BTC rose approximately 11.92% from 1st November 2022 until 25th April 2023 (from 3 855 510 to 4 315 213 addresses); meanwhile, the increase in the number of addresses from 1st March 2023 until 25th April 2023 amounted to 1.8%.
Next, Bitcoin addresses with more than 1 BTC in holdings stood at 909 577 on 1st November 2022. This figure rose to 994 701 on 25th April 2023, representing a 9.37% increase over the past six months (but showing only a 1.23% increase between 1st March 2023 and 25th April 2023).
Overall, all three types of addresses in the “small investor” category saw relatively significant increases (with big spikes in the number of addresses following November 2022 lows).
Addresses with balances of more than 0.01 BTC, 0.1 BTC, and 1 BTC (first category - medium investors)
As for Bitcoin addresses with more than 10 BTC in the balance, these rose from 150 873 on 1st November 2022 to 155 967 on 25th April, showing a growth of 3.37%. Meanwhile, these addresses rose only 0.28% between 1st March 2023 (from 155 522) and 25th April 2023. The growth in the number of addresses in this category was significantly less than in the previous category of “small investors.”
Addresses with balances of more than 100 BTC and 1000 BTC (third category - large investors)
Addresses with more than 100 BTC in the balance saw an uptick from 15 848 on 1st November 2022 to 16 160 on 19th December 2022. However, as the price increased, these addresses slowly declined (until reaching 16 018 on 8th April 2023). Interestingly, at that time, Bitcoin reached 28 600$, and the number of addresses started to shrink very quickly (suggesting that big players were unloading their holdings into the hands of smaller investors, just like we speculated); the number fell to 15 819 on 16th April 2023, accompanying Bitcoin above 30 000$. Then, once Bitcoin started to drop below this critical level, the number of addresses rose slightly (reaching 15 891 on 25th April 2023).
Finally, the most prominent addresses carrying more than 1 000 BTC amounted to 2 135 on November 2022; however, this figure dropped to only 2 019 addresses on 25th April 2023, marking a 5.43% decrease (and a decrease of nearly 20% from an all-time high of 2 490 on 8th February 2021).
Growth trends among addresses in the “large investors” category paint a stark contrast to what is going on in the preceding two categories. With that said, we think it is very likely that we are seeing merely a temporary shift in Bitcoin reacting to the banking sector. Based on this discrepancy, we continue to think that small investors are buying from more savvy traders and will end up holding the bag in the end (which we warned about already a few weeks ago). Because of that, we think it is important to be very cautious, especially as market volatility is picking up as fast as it is.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
In the same time span, Bitcoin rebounded from 26 931$ back to 30 000$. As this raises more questions about Bitcoin maturing as an asset (and becoming what it was intended to be), we think it is important to look at Bitcoin addresses to determine whether this might be only a temporary shift or a lasting trend. For this purpose, we will focus on a period starting in November 2022, which marked the 2022 lows for Bitcoin and coincided with a big expansion of Bitcoin addresses.
Addresses with balances of more than 0.01 BTC, 0.1 BTC, and 1 BTC (first category - small investors)
Based on the information obtained from LookIntoBitcoin, Bitcoin addresses with more than 0.01 BTC in the balance stood at 10 816 039 on 1st November 2022. This figure rose to 11 774 869 on 25th April 2023, marking an increase of 8.8% (accounting for a 2% increase from 1st March 2023 until 25th April 2023).
Addresses with more than 0.1 BTC rose approximately 11.92% from 1st November 2022 until 25th April 2023 (from 3 855 510 to 4 315 213 addresses); meanwhile, the increase in the number of addresses from 1st March 2023 until 25th April 2023 amounted to 1.8%.
Next, Bitcoin addresses with more than 1 BTC in holdings stood at 909 577 on 1st November 2022. This figure rose to 994 701 on 25th April 2023, representing a 9.37% increase over the past six months (but showing only a 1.23% increase between 1st March 2023 and 25th April 2023).
Overall, all three types of addresses in the “small investor” category saw relatively significant increases (with big spikes in the number of addresses following November 2022 lows).
Addresses with balances of more than 0.01 BTC, 0.1 BTC, and 1 BTC (first category - medium investors)
As for Bitcoin addresses with more than 10 BTC in the balance, these rose from 150 873 on 1st November 2022 to 155 967 on 25th April, showing a growth of 3.37%. Meanwhile, these addresses rose only 0.28% between 1st March 2023 (from 155 522) and 25th April 2023. The growth in the number of addresses in this category was significantly less than in the previous category of “small investors.”
Addresses with balances of more than 100 BTC and 1000 BTC (third category - large investors)
Addresses with more than 100 BTC in the balance saw an uptick from 15 848 on 1st November 2022 to 16 160 on 19th December 2022. However, as the price increased, these addresses slowly declined (until reaching 16 018 on 8th April 2023). Interestingly, at that time, Bitcoin reached 28 600$, and the number of addresses started to shrink very quickly (suggesting that big players were unloading their holdings into the hands of smaller investors, just like we speculated); the number fell to 15 819 on 16th April 2023, accompanying Bitcoin above 30 000$. Then, once Bitcoin started to drop below this critical level, the number of addresses rose slightly (reaching 15 891 on 25th April 2023).
Finally, the most prominent addresses carrying more than 1 000 BTC amounted to 2 135 on November 2022; however, this figure dropped to only 2 019 addresses on 25th April 2023, marking a 5.43% decrease (and a decrease of nearly 20% from an all-time high of 2 490 on 8th February 2021).
Growth trends among addresses in the “large investors” category paint a stark contrast to what is going on in the preceding two categories. With that said, we think it is very likely that we are seeing merely a temporary shift in Bitcoin reacting to the banking sector. Based on this discrepancy, we continue to think that small investors are buying from more savvy traders and will end up holding the bag in the end (which we warned about already a few weeks ago). Because of that, we think it is important to be very cautious, especially as market volatility is picking up as fast as it is.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Comment:
Correction to the title's typo "What are all types of BTC addresses doing?"
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