Overheated Market? 95% of Bitcoin Wallets Are Now in a State of Profit

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As a seasoned crypto investor with a decade of experience under my belt, the recent surge of Bitcoin to over $68,000 has me both exhilarated and cautiously optimistic. The data shared by IntoTheBlock suggests that we’re witnessing an unprecedented level of profit among Bitcoin addresses, which historically has signaled strong bullish momentum. However, I remember the dot-com bubble too well to ignore the potential for overextension.

Over half of all Bitcoin users are now in profit as the price reached above $68,000, causing a surge of optimism and excitement within the market during its recovery.

As per information from the on-chain data provider IntoTheBlock, approximately three percent of Bitcoin wallets are now breakeven, meaning they’re neither making nor losing money given the current prices. Meanwhile, roughly two percent of Bitcoin holders haven’t yet realized a profit because the current price levels are below their initial investment cost.

As a crypto investor, I’m observing an upward trend: 95% of Bitcoin addresses are currently in profit, which suggests a surge in market optimism. Historically, such levels have indicated robust bullish momentum, but they can also signal potential overextension. Will this lead to a breakout, or could it be a sign that the market is becoming too heated? Only time will tell.

— IntoTheBlock (@intotheblock) October 17, 2024

Currently, I find myself in a position where Bitcoin is trading at approximately $68,600. Over the last seven days, it has surged by over 10%, an uptrend that coincides with a substantial price recovery. This recovery appears to be linked to significant accumulation of Bitcoin by new whale wallets, indicating a strong buying interest in the market.

Recently, these significant Bitcoin investors have been purchasing Bitcoin in large amounts, causing them to control approximately 9.3% of the total Bitcoin supply, which equates to roughly $132 billion. Over the course of this year, their Bitcoin holdings have increased by an astounding 813%. As a result, they now own about 1.97 million Bitcoin coins.

Every one of these digital wallets holds more than a thousand Bitcoins, and the typical coin age is less than 155 days. These types of wallets encompass both those managed by custodians and individual ones belonging to Bitcoin spot exchange-traded funds (ETFs) that debuted in January, without considering exchanges or miners.

Significantly, Bitcoin ETFs that were introduced this year following the U.S. Securities and Exchange Commission’s approval have accumulated over $20 billion in combined assets, with BlackRock’s iShares Bitcoin Trust (IBIT) being the frontrunner, amassing approximately $22.4 billion in investments.

Over the past week, these funds surpassed a particular threshold due to over $1.5 billion worth of investments pouring in. IBIT was joined by Fidelity’s FBTC and ARK 21Shares’ ARKB during this period. However, only two Bitcoin ETFs have experienced outflows so far this year: the Hashdex Bitcoin ETF (DEFI) with $1.79 million in withdrawals, and Grayscale’s GBTC with a massive $20.1 billion in withdrawals.

As a crypto investor, I’ve witnessed a remarkable growth in the funds under my watch. According to Eric Balchunas, a senior ETF analyst at Bloomberg, these funds have surpassed the $65 billion mark in total assets. This impressive milestone was reached in less than a year, a feat that normally took gold ETFs five years to achieve when it comes to accumulating such inflows of around $20 billion.

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2024-10-19 08:08