What Are Bitcoin Diamond Hands?
In the world of cryptocurrency, “diamond hands” refers to investors who hold onto their Bitcoin no matter what happens in the market. These investors are strong and don’t sell their Bitcoin, even during major market crashes. Recently, data has shown that 32% of the total Bitcoin supply has not been moved in over five years. This means that a large number of Bitcoin investors have been holding their coins for a very long time, which is a sign of their strong belief in the cryptocurrency.
Understanding Dormant Bitcoin Supply
The Bitcoin supply that has not been moved for five or more years is often called the “dormant supply.” This supply is made up of coins that have been left untouched in wallets for at least five years. In simpler terms, these are the Bitcoins that have not been spent or transferred by their owners for a long time. This can happen for several reasons, such as the owner simply choosing not to sell or the keys to the wallet being lost, making it impossible to move the coins.
Bitcoin Long-Term Holders: The Resilient Investors
Investors who have held their Bitcoin for more than 155 days are known as long-term holders (LTHs). When these LTHs hold their coins for over five years, they are often referred to as the “diamond hands” of the Bitcoin market. These investors are considered the most resilient because the longer they hold their Bitcoin, the less likely they are to sell. This is important because it shows that a significant part of the Bitcoin supply is being held by people who believe in the long-term value of the cryptocurrency.
Why Bitcoin Supply Remains Dormant
There are several reasons why a large portion of Bitcoin’s supply remains dormant. One reason is that many long-term holders are committed to their investment and believe that the value of Bitcoin will continue to rise. Another reason is that some of the dormant supply may be lost forever. This could happen if the keys to access the Bitcoin wallet are forgotten or lost, making it impossible to move the coins. As Bitcoin ages, it becomes more likely that some of the supply is lost, but the remaining portion is held by investors with strong conviction.
The Impact of Dormant Bitcoin on the Market
The fact that 32% of the total Bitcoin supply has not been moved in over five years has significant implications for the market. When a large portion of the supply is held by long-term holders, it reduces the number of Bitcoins available for trading. This can affect the price of Bitcoin because the fewer Bitcoins that are available, the more valuable each one becomes. Additionally, the strong belief of these long-term holders can have a stabilizing effect on the market because they are less likely to sell during periods of high volatility.
Bitcoin HODLers and Market Trends
HODLers, or those who “Hold On for Dear Life,” are known for their commitment to holding onto their Bitcoin despite market fluctuations. The recent data shows that even though some long-term holders sold their Bitcoin earlier this year to take advantage of price rallies, the overall percentage of dormant Bitcoin has remained relatively stable. This suggests that most of these investors are still holding onto their coins, even after experiencing major market events like the COVID-19 crash, the 2021 bull market, and the 2022 bear market.
The Future of Dormant Bitcoin Supply
Looking forward, it’s unlikely that the majority of these diamond hands will sell their Bitcoin unless there are very special circumstances. The resilience of these investors is a strong indicator of their confidence in Bitcoin’s future. As the cryptocurrency market continues to evolve, the actions of these long-term holders will play a crucial role in determining the future value of Bitcoin.
Bitcoin Price and Market Behavior
Recently, Bitcoin’s price dropped by almost 4%, bringing it down to $59,100. However, this price movement does not seem to have shaken the confidence of long-term holders. The fact that 32% of the supply has remained dormant for over five years shows that these investors are not easily swayed by short-term market fluctuations. This stability is essential for the health of the overall cryptocurrency market.
Bitcoin diamond hands have proven their resilience by holding onto their coins for over five years. With 32% of the Bitcoin supply remaining dormant, these long-term holders continue to have a significant impact on the market. Whether through their strong conviction or lost access to wallets, these investors have shown that they are in it for the long haul. As a result, the future of Bitcoin is closely tied to the actions and beliefs of these diamond hands.
