Encouraging Signs That HODLers Are Holding

After teasing cryptocurrency market participants with a move above $80,000, bitcoin is now flirting with its lowest levels in close to a month. However, evidence indicates that bitcoin’s bumpy ride isn’t scaring away some investors.

In what could be good news for the digital currency itself and ETF’s such as the Coinshares Valkyrie Bitcoin Fund (BRRR), data indicate more bitcoin investors are long-term holders of the largest cryptocurrency. Add to that, many of the retail investors in this cohort frequently add to their positions, albeit in incremental fashion, when bitcoin’s price retreats.

“Bitcoin’s long-term holder (LTH) supply is approaching all-time highs. Currently, 16.3 million BTC is held by this cohort, defined as investors who have held bitcoin for at least 155 days,” reported CoinDesk.

Read more: Some Analysts See Big Upside for These WGMI Holdings

Bitcoin Dip a Boon for BRRR?

While it’s typical for the amount of long-term holders to increase during periods of Bitcoin price lethargy, the scenario is nonetheless meaningful. It could have positive effect on ETFs such as BRRR — for multiple reasons, at that.

First, long-term holders keep supply off the market — important with already supply-constrained bitcoin. Second, increasing willingness to view bitcoin through a long-term lens confirms that the asset is maturing. That means every decline or correction won’t shake some investors.

Those points are relevant in assessing spot bitcoin ETFs such as BRRR because those funds brought more advisors and investors into the cryptocurrency arena, confirming the power of the ETF wrapper. Something else to consider is the historical trend of LTH accumulation as a harbinger of upside.

“Typically, during periods of price weakness or full bear market conditions, long-term holders, often viewed as the smarter money, begin increasing exposure after divesting during the previous bull market. During both the 2015 and 2019 bear markets, LTH supply increased as investors accumulated during price weakness,” according to CoinDesk.

Indeed, holders and HODLers are buying the dip. Some may well be using ETFs such as BRRR to express constructive long-term views on the king of digital currencies.

“However, since the ETF launch in January 2024, LTH supply has largely fluctuated between 14 million and 16 million BTC. Now, it appears to have broken out of a 2.5-year downtrend, suggesting long-term holders are once again accumulating rather than distributing during bitcoin’s depressed price levels,” noted CoinDesk.

For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.

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