As a seasoned researcher and long-time observer of the crypto market, I find the current state of Bitcoin intriguing. The report by Cryptoquant revealing the negative demand growth for BTC is indeed worrying, but it’s not uncharted territory for those who have been around since its inception.
According to a recent study by the cryptocurrency analysis platform Cryptoquant, the desire for Bitcoin (BTC) has fallen below zero, indicating decreased demand. However, the report also emphasized the strong belief among long-term investors in Bitcoin, which is certainly a promising sign for the leading digital currency.
Bitcoin’s Demand On The Decline
According to Cryptoquant’s latest findings, the interest in the primary cryptocurrency has decreased significantly since April, even dipping into negative figures as of this month. The report also showed that the demand for Bitcoin, which was growing by approximately 496,000 coins per month in April, has now shrunk to a negative growth rate of 25,000 coins this month.
In simpler terms, Cryptoquant stated that “apparent demand” refers to the gap between the daily Bitcoin block rewards and the year-long change in the amount of unchanged Bitcoin in circulation. This important metric suggests a sluggish growth in Bitcoin’s demand. This slow demand for Bitcoin is also noticeable by the fact that the growth rate of large Bitcoin investors’ total holdings has decreased from a 6% monthly increase in March to a 1% increase now.
Due to a decrease in interest for the premier cryptocurrency, its market price has been affected significantly. For instance, Bitcoin (BTC) plummeted from its record high of $73,000 in March down to $49,000 by early August. Furthermore, the crypto has stayed within the $50,000 price range since then because demand continues to be sluggish.
According to Cryptoquant, a potential reason for the decrease in demand for Bitcoin could be linked to the decline in activity from US Spot Bitcoin ETFs. Purchases from these funds dropped significantly, from approximately 12,500 BTC per day in March down to about 1,300 BTC last week. This reduced buying interest in the spot market within the US may also explain the lower premium for Bitcoin on the Coinbase platform. Initially, the Bitcoin premium on Coinbase rose to 0.25% following the launch of these funds in January.
cryptoQuant noted that an increase in the growth of Bitcoin’s demand, predominantly driven by Spot Bitcoin Exchange-Traded Funds (ETFs), is crucial for Bitcoin’s price to rebound and potentially reach new peak prices in this market cycle.
Long-Term Holders Remain Bullish On Bitcoin
Regardless of the falling interest in Bitcoin, long-term investors maintain optimism and have seized the opportunity presented by reduced prices to increase their BTC investments. As per Cryptoquant’s data, these investors have been buying BTC at an “unprecedented pace,” with their holdings expanding at a remarkable monthly rate of 391,000 BTC, setting a new record high.
It’s noteworthy that the appetite for Bitcoin from long-term investors is increasing more rapidly than it was during the first quarter, when Bitcoin was near its all-time high price. This underscores their commitment to ‘buying the dip’. According to NewsBTC, approximately 3 out of every 4 Bitcoins are being held by these long-term investors and haven’t been moved for over half a year, even as prices have dropped.
As I pen this, Bitcoin stands roughly at $59,400, marking a 2% decrease in its value over the past day, as per the latest data from CoinMarketCap.
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2024-08-22 00:41