With bitcoin still strong in 2022, a growing number of long-term investors hold significant holdings in the cryptocurrency and are optimistic that its recent slump was only temporary.
Digital currency brokerage Genesis trading said the amount of bitcoin held in digital wallets with no outflows for more than five months is on the rise.
The amount of bitcoin in “illiquid” wallets – which spend less than a quarter of their inflows – is also growing, meaning that many exchanges are trading fewer coins actively.
Still, December was a dismal month for bitcoin, losing nearly 20% of its value. Ether, the second-largest coin, also lost some of its value. These declines were the result of inflation fears and interest rate hikes by the U.S. Federal Reserve.
While bitcoin and ether posted gains last week – up 2.9% to $43,107 and 6.3% to $3,350 respectively – they are still a long way from their highs of $69,000 and $4,868 respectively in 2021.
Research by cryptocurrency research firm Delphi Digital showed an identical shift in investors holding on to their bitcoin for longer periods, which “illustrates a transference from shorter-term ‘weak hands’ to long-term ‘strong hands’.”
Meanwhile, bitcoin miners are recovering from mining crackdowns in China and recent turmoil in Kazakhstan, one of the world’s hubs for bitcoin mining.
The average “hash rate” of bitcoin, a measure of the performance of the bitcoin computing network, reached an all-time high of more than 215 million terahashes per second on Thursday, according to blockchain data provider Glassnode.
For more information, read the original story in Reuters.