Bitcoin's Rocky Road
We had all thought that last week's surge marked the beginning of new all-time highs, but those dreams quickly turned into a white-knuckle reality check. The 10% dip we've seen since then has left many investors second-guessing their stock picks.
But I don't think it's time to panic just yet.
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Let's get to what is going on behind the scenes.
One of the most interesting trends I've come across is quite literally the dwindling Bitcoin reserves on exchanges. Why does this matter?
Simple: when there is less Bitcoin that can be sold at a moment's notice, that often suggests people are HODLing for the long term. They aren't in it to make a quick buck, they're in it for the long haul.
Interesting indeed, this trend towards self-custody. More and more people are taking matters into their own hands with digital assets, storing them in personal wallets rather than leaving them on exchanges. It is as if the mindset is shifting from trading to actually owning.
But here is where things take a fascinating turn: the big whales – the so-called large, long-term holders, have silently been accumulating more Bitcoin. In the last month alone, they have added a staggering 262,000 BTC to their stash. That is no chump change. What this ultimately means is that whales now control about 75% of all Bitcoin.
If that's not skin in the game, I don't know what is.
You are probably wondering, "Is this a good thing?" I feel it's a double-edged sword.
On one side, it shows very strong faith in the bright future of Bitcoin. These guys do not sell, they buy more. That is a pretty big vote of confidence. On the flip side, it does become concerning regarding wealth concentration in the crypto space – that is something we've got to keep an eye on.
Now, let's change gears and talk about the miners for a second.
The current hash price, a miner term for how profitable it is to mine Bitcoin, has hit an absolute bottom. In the past, that has been an excellent sign that we're near a price bottom, too. It's like the calm before the storm, but in a good way.
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So, what does all that mean to an average Joe who wants to get into Bitcoin?
Well, if history is anything to go by, then this could be your golden buying opportunity. Of course, I am not a financial advisor, and this is crypto we are talking about, as unpredictable as anything can get. But if you have been sitting on the fence, perhaps now is a good time to take a closer look.
We can be certain the ride to 60,000 and beyond will be anything but smooth: more dips, more rallies, more heart-stopping moments will surely follow.
But deeper trends of less Bitcoin on exchanges, more in long-term storage, miners feeling the squeeze, promise to make for a much more interesting future.
Posted Using InLeo Alpha