The largest cryptocurrency, Bitcoin (BTC), has had a 70% decline from its all-time high in November 2021, suggesting that it has already experienced the worst of this bear market as it touched the $17,500 mark.
The latest CPI report for June revealed that inflation in the United States had reached 9.1 percent, the highest level since November 1981. This news only fueled a downward trend in Bitcoin and the cryptocurrency market. At the time of writing, BTC is trading at $19,590 down by more than two percent.
According to cryptocurrency exchange Coinbase, long-term bitcoin investors have maintained their holdings in recent weeks even as speculators have fled the market, pushing the cryptocurrency below $20,000.
The fact that long-term investors are keeping bitcoin suggests that they have faith in the currencys ability to weather what seems to be a Federal Reserve-induced down market and eventually flourish as a fiat alternative or digital form of gold.
Long-term investors are those that keep bitcoin in their wallets for a minimum of six months, according to the paper titled The Elusive Bottom.
Recent BTC selling has been carried out almost exclusively by short-term speculators, said David Duong, head of institutional research at Coinbase.
Duong referred to investors holding onto their bitcoin as a sign of optimistic optimism that maintains the equilibrium between supply and demand in the face of speculator selling, a regular occurrence in a bear market.
According to on-chain statistics, investors currently hold around 77 percent of the 21 million bitcoins available. Even if the percentage is a little lower than the early January high of 80%, it is still significantly higher than the highest of 60% that was recorded during the height of the late 2017 bull run.
The information indicates that over the last three and a half years, a good amount of money has been transferred from traders or speculators to investors.
This year, the Feds move to reduce liquidity in an effort to fight excessive inflation has mostly been to blame for the more than 50% decline in Bitcoins price to $20,000.
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Heres How Long-Term Bitcoin Holders Are Reacting To The Crypto Bear Market - Coinpedia Fintech News
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