Neither sold nor bought. The total number of bitcoins that did not change hands in more than a year exceeded the mark of 10 million. In 12 months, about 10.7 million inactive bitcoins (R$ 387 billion in present value) according to Digital Assets Data, a fintech that analyzes data from the cryptocurrency market.
Considering that the total number of bitcoins in circulation is 18.14 million, this means that almost 60% of the currencies were not moved during the year. That’s the highest percentage of inactive bitcoins for more than a year since the beginning of 2017.
Why are there so many inactive bitcoins?
The world’s leading cryptocurrency witnessed substantial changes last year. In the first six months of 2019 it went from US$ 3,693 to US$ 13,879. Then it fell, closing at US$ 7,179 in mid-December. As a result, the bitcoin nearly doubled last year, despite the brutal settlement in the second semester.
Even so, a large number of bitcoins remained inactive. This possibly happened because investors expect a significant price increase after the mining reduction in half, foreseen for May. The process, repeated every four years, reduces by half the block rewards in order to keep inflation under control.
“Many investors possibly still remain with the price of bitcoin below of what was purchased in 2017 and 2018”
Investors bought at higher prices
Another strong reason for the growing number of inactive bitcoins may be the fact that a significant share of HODLers (holders?) is keeping their investments to avoid losses. “Many investors possibly still remain with the prices of bitcoin below of what was purchased in 2017 and 2018”, said Kevin Kaltenbacher of Digital Assets Data.
Prices higher than the 2019 hike of US$ 13,879 were observed between the beginning of December 2017 and February 2018. For that reason it is possible imagine that many investors have acquired currencies during this bullish market frenzy.
According to Coindesk, the fact that these investors have not sold the assets indicates that they are likely to be betting on long-term growth prospects.
With information from Coindesk.