The seven-day moving average of the number of addresses holding 10,000 bitcoins or more rose to 111 on Wednesday, the highest level since Aug. 2, 2019, according to blockchain intelligence firm Glassnode. That number has risen by more than 11% since early March.
Large crypto investors, popularly known as “whales,” seem to be accumulating bitcoin amid the ongoing price rally.
Bullish narrative reinforced
Bitcoin was trading near $8,900 at press time, a 130% gain from the low of $3,867 reached on March 13, according to CoinDesk’s Bitcoin Price Index.
Bitcoin is now reporting a bigger year-to-date gain compared to gold. While the cryptocurrency is up 21%, the yellow metal has seen a 12% increase.
The year-to-date performance may reinforce the narrative that bitcoin is a hedge against global economic malaise, fiscal and monetary indiscipline and could continue to draw demand from both small and large investors.
“The year-to-date performance indicates that investors’ awareness of the digital asset has increased and its role as a potential diversification vehicle for traditional portfolios has been underscored by its strong recovery from its recent lows, relative to more traditional markets. We expect this strength to persist as Bitcoin continues to take pole position in the race,” said Stack’s Dibb.
Not a perfect indicator
The rise in the number of unique addresses holding more than 10,000 bitcoins does not necessarily mean an influx of new whales into the market. After all, a single investor can hold multiple addresses.
Further, cryptocurrency exchanges tend to hold large balances. For instance, two of the top five addresses on the rich list (a table of the addresses holding the most bitcoins), published by bitinfocharts.com, belong to prominent exchanges Huobi and Bitfinex.
“Some of these addresses are owned by top exchanges which usually hold large reserves in their cold wallet. So this doesn’t necessarily signal a clear behavior for market activity,” said Coincurve’s Chen.