Bitcoin, despite its volatility, has witnessed a significant rise in the number of holders. This trend is particularly noteworthy given the recent tweet highlighting the increase in dormant Bitcoin supply that has remained untouched for at least a year. The resilience of Bitcoin holders, or HODLers as they are often called, is evident in the Percent of Supply Last Active 1+ Years Ago metric, which indicates a growing number of BTC holders refusing to sell their holdings.
This steadfastness is remarkable when we consider the events of a year ago. During the collapse of Terra [LUNA], Bitcoin initially dropped to $20,000, which coincidentally marked the record high for inactive supply at the time. Despite this challenging period, Bitcoin holders have remained strong, indicating a deep-rooted belief in the long-term value and potential of the cryptocurrency.
In addition to the unwavering commitment of Bitcoin holders, institutional interest in Bitcoin ETFs has also contributed to the bullish sentiment surrounding the cryptocurrency. Several funds have expressed their desire to launch Bitcoin ETFs, demonstrating a growing recognition of Bitcoin's legitimacy as an investment asset. The introduction of ETFs is expected to drive more liquidity into the crypto market and further support Bitcoin's adoption.
One significant advantage of Bitcoin ETFs is their potential to address the psychological bias known as unit bias. Unit bias refers to the perception that the absolute price of an asset determines its affordability or attractiveness. In the case of Bitcoin, the high price per unit may discourage some individuals from investing, even if they have the option to purchase fractional amounts. This bias can significantly impact people's decision-making process when it comes to investing in Bitcoin or other assets.
By offering investors the opportunity to purchase units of the ETF at a lower price, Bitcoin ETFs can effectively eliminate the unit bias that hinders broader participation. This means that individuals can now invest in Bitcoin without feeling discouraged by its seemingly high unit price. It opens up new possibilities for individuals to engage with Bitcoin as an investment, ultimately driving greater adoption and market liquidity.
While the current price of Bitcoin stands at $30,016, along with a notable growth in its price, the MVRV ratio for Bitcoin has also experienced a surge. This indicates that most addresses holding Bitcoin at the moment are in a profitable position. The question remains whether these addresses will be tempted to sell their holdings as Bitcoin's price continues to surge.
As Bitcoin continues to navigate its volatile market, the increasing number of holders, the growth in dormant supply, and the interest in Bitcoin ETFs are all significant indicators of the cryptocurrency's resilience and potential. The introduction of ETFs, in particular, has the potential to remove barriers to entry, making Bitcoin more accessible and attractive to a wider range of investors. This, in turn, may further drive adoption and liquidity in the crypto market, solidifying Bitcoin's position as a valuable asset class for both individual and institutional investors.