The decline in hodler balances does not signal a widespread loss of confidence in the prospects for digital gold. However, miners, amid the turbulence caused by the FTX collapse, shed 9.5% of Bitcoin reserves, according to Glassnode.
With the devastating collapse of #FTX, the industry has experienced the most shocking insolvency since Mt Gox
In this report, we analyze:
— #FTX bank run
— #Bitcoin holders seeking safety in self-custody
— Response of Bitcoins strongest handsRead more👇https://t.co/cVUE7QYevQ
— glassnode (@glassnode) November 14, 2022
The distressed miners shed 7,760 BTC in the latest reporting week—the largest decline in balances since September 2018.
The number of coins owned by hodlers has fallen by 61,500 BTC since November 6. They spent 48,100 BTC in the last seven days.
Compared with historical precedents, the scale of the change does not signal a loss of faith in the long-term prospects for digital gold, experts said. For this conclusion to lose its relevance, the trend would need to prove sustainable.
“The ‘average’ age of spent bitcoins amid the hodlers’ ‘awakening’ has tripled relative to a month-and-a-half ago. The metric rose to 90 days. The spike in spending of old coins corresponds to peaks seen during previous sell-offs amid capitulation and profit-taking in the 2021 bull market.”
A rise or maintenance of the metric at elevated levels would indicate the spread of panic to a broader cohort of long-term investors. For now, this is an event, not a trend, experts said.
Earlier, ForkLog presented analyst materials that revealed the link between FTX and Alameda Research (problems began after the Terra collapse), and also showed the loss of trust by Bitcoin investors in centralized platforms. The latter was characteristic of all market participants — from ‘shrimp’ (less than 1 BTC) to whales (more than 1000 BTC).
Experts also noted the withdrawal of stablecoins from DeFi protocols to exchanges for buying Bitcoin and Ethereum and placing the latter in non-custodial wallets.
Earlier, former MicroStrategy head Michael Saylor and Binance CEO Changpeng Zhao urged investors to store crypto assets in self-custody.
Zhao also compared the current industry situation to the 2008 financial crisis. In Zhao’s view, even more companies could fail in the coming weeks.
Earlier, cryptocurrency exchanges, including Binance, began to disclose information about reserves in digital assets.
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