10/12/23 Roundup: All Time HODL Strength
Hi all,
This is Dylan LeClair, presenting this week’s Onramp Weekly Roundup.
Before we get started… If you’re a HNWI or Institution looking for the best way to get exposure to bitcoin, Onramp Bitcoin could be the right fit for you – schedule a chat with us to discuss your situation & needs.
And now, here’s the weekly roundup…
All Time HODL Strength
In the last three months, a mere 11.69% of Bitcoin’s circulating supply has been traded, marking a historic low. While the constraint of the bitcoin supply has been evident for much of the past decade, the extremity of this supply constraint is especially prominent.
Furthermore, 94.8% of Bitcoin’s total supply stayed stationary in the past month, another record.
This sets the stage for what’s to come. While supply inelasticity can work both ways—meaning the relative lack of liquidity can lead to significant exchange rate shifts with any major buy or sell flows—in the medium to long term, it paves the way for the next surge in market value. Despite potential short-term volatility, the current state of accumulation and the anticipated future flows in the Bitcoin spot market present a promising outlook.
As supply dynamics tighten, it will take increasingly smaller capital inflows to trigger a substantial upward price adjustment, which often becomes a self perpetuating feedback loop.
Quantifying the Accumulation
Who’s fueling the supply-side dynamics in the bitcoin market? It’s not large predominantly institutional investors or U.S.-based financial whales—at least not at the moment. The primary force behind the buying spree consists of smaller entities.
Specifically, we’re tracking the monthly shifts in holdings among groups of interconnected wallets that each possess less than 100 BTC. Throughout most of 2023, this particular group has been aggressively accumulating bitcoin, outstripping the rate of new supply creation through mining. While such accumulation doesn’t guarantee immediate price surges, it does set the stage for explosive gains. This occurs as increasing demand meets an ever-shrinking pool of available supply, thereby tilting market conditions towards a bullish trajectory.
Displayed below is the percentage decline from all-time highs for the top 13 crypto assets (excluding stablecoins), measured in bitcoin terms. Each has seen a minimum drop of 60% when valued in bitcoin, while bitcoin itself is around 60% off its own all-time high.
Bitcoin serves as the benchmark, and this data underscores the essence of the crypto landscape: most of crypto is essentially riding on bitcoin’s coattails, benefiting from its liquidity and hype, while a majority trend to irrelevance against the world’s predominant digital monetary asset.
Podcast of the Week
E020: Building the Bloomberg Terminal for Bitcoin with Alon Shvartsman
In this new episode of The Last Trade, Alon Shvartsman delves into the development of Onramp Terminal, a platform tailored specifically for Bitcoin analytics. He emphasizes the need for high-quality, Bitcoin-specific data to make informed financial decisions, steering clear of distractions from the broader crypto market.
The Onramp Terminal is built to provide institutional investors with real-time market and on-chain data, extending beyond mere price metrics to deliver a holistic view of Bitcoin’s fundamentals. Focused exclusively on Bitcoin and developed in partnership with Newhedge, the terminal is designed to furnish investors with the critical data needed for sound decision-making.
Be sure to explore the Onramp Terminal and also listen to the full episode of The Last Trade here.
Closing Note
Wrapping up this week’s digest, Onramp Bitcoin invites you to explore our offerings on our website.
With an industry-leading multi-party custody solution, Onramp allows Bitcoin withdrawals without triggering a taxable event. Onramp stands as an optimal solution for HNWI and institutions seeking Bitcoin exposure prior to transitioning to self-custody.
If Onramp’s offerings align with your needs, or those of someone you know, feel free to schedule a chat with us here.
Onward and Upward,
Dylan LeClair