Despite Bitcoin posting several new all time highs during the last calendar year and moving above $1 trillion in valuation, many of the relatively early investors of the cryptocurrency are still holding on strongly to their Bitcoin stash and haven’t sold much, according to analytics website Glassnode. This has helped keep the cryptocurrency at the top of the standings and provide crucial floors to the price index when the market crashed several times during the year.
For many of the people who got involved with Bitcoin in its early days, HODL (Hold On for Dear Life) is not just a trading strategy but an ideal. Many of these investors are now quite wealthy overall. For example, if a person invested just $500o in Bitcoin in 2013 at a price of $200, he/she would be worth $1.3 million today if they didn’t sell. These are some of the most battle-hardened crypto warriors ever and while big price jumps do bring a smile to their faces, they don’t sell it easy.
This was quite evident from recent analytics by Glassnode. They use a metric to measure to measure this HODL behaviour called Coin Days Destroyed (CDD). This is the ratio of coins being spent by old players. Despite the incredible run of 2021, this price metric has remained near record lows. The CDD essentially measures the tendency of investors to invest and hold on to the cryptocurrency for multiple years.
The website states:
“Coin Days Destroyed is a measure of economic activity which gives more weight to coins which haven’t been spent for a long time.”
While the old players hold on to their crypto stash well, other buyers are much more prone to selling, another metric confirms. Especially, the people who tried to jump on the crypto bandwagon in 2021 and bought at a relatively high price, they were the most likely to sell, often for a loss. A metric from Unchained Capital called Hodl Waves confirms this pattern too. The statistic shows that the coins bought anywhere between the last 3-6 months are the most liquid at the moment and move around a lot.
Investing and HODLing crypto is the a great strategy that is working out well for many early investors. Even those who picked up the crypto at around $5k-$10k range just last year have made big gains. However, every few years, Bitcoin gets to new highs so ultimately it is the HODLers who are making the most money.
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