Bitcoin’s rally above $70,000 has shifted the balance between long-term investors and speculators. Glassnode has detailed changes in on-chain metrics.
In addition to the price, the realized capitalization metric also reached a new all-time high. This indicator, which assesses the “aggregate on-chain wealth,” has increased by $40 billion since March 1, reaching $504 billion.
The monthly growth rate of the indicator hit $54 billion, a level last seen during the bull market of 2021. Analysts note this underscores the significant capital inflow following the success of ETFs in the United States.
Experts observed a transfer of “wealth” from long-term investors to speculators, a trend seen during new ATH conditions.
Since October 2023, the share of “realized capitalization” attributed to “young” coins (those moved within the last three months) has increased by 138%. This was driven by net sales from market participants who purchased bitcoins at lower prices.
The following chart illustrates a decline in hodlers’ supply by 660,000 BTC from the peak in November 2023. Previously, experts calculated that 57% of this reduction was due to GBTC redemptions by Grayscale. The number of coins held by short-term investors increased by 810,000 BTC, with an additional 150,000 BTC coming from exchange balances.
To assess the absorption of coins distributed by hodlers by new demand, Glassnode analyzed two trends:
- — the dynamics of the relative decline in long-term holders’ supply from peaks;
- — the dynamics of the increase in speculators’ supply from cyclical lows.
After reaching ATH in previous bull markets, the first indicator ranged from -14% to -25%. The second peaked near the formation of a cyclical high, increasing by over 83%.
“If we make an overly simplified, approximate assumption that these parameters reflect the demand/supply turning point at cycle peaks, it can be concluded that the current market has experienced about 30% of a typical distribution cycle,” stated the experts.
The RHODL ratio also helps assess the transfer of “wealth” from “old” holders to new investors and speculators. The chart below highlights zones where the metric exceeds its current value of 6300. Analysts explained that the current dynamics align with historical precedents of reaching new all-time highs.
“By many measures, the current cycle […] resembles previous ATH breakthroughs […]. The dynamics reflect a healthy balance between distribution and new demand and provide insight into the mechanics leading to the establishment of cyclical peaks,” concluded the experts.
In the wake of the launch of the first spot bitcoin ETFs in the U.S., the AUM of nine “new” structures (excluding Grayscale’s “converted” GBTC) reached approximately 420,000 BTC. This accounts for about 2% of the total issuance of the first cryptocurrency.
On March 12, the net inflow into spot exchange-traded funds based on the first cryptocurrency amounted to $1.05 billion. This figure exceeded the previous February record of $673 million by 56%.