According to Philip Gradwell, chief economist at analytical firm Chainalysis, more than 1,000 wealthy investors have accumulated large amounts of bitcoin in their wallets over the past three months.
Gradwell discovered that when Bitcoin was worth about $ 54,500, a group of 1,200 investors bought 450,000 BTC for a total of $ 24.5 billion, which means they took advantage of the drawdown and had no doubt about the further growth of the industry. The economist outlined the details of his research in a recent publication on the study of financial flows in the blockchain. Let’s talk about it in more detail.
Today, the market situation seems to be significantly better than it was during the Bitcoin drawdown at the end of last week. Specifically, Bitcoin is trading at $ 52,722, up 6.9 percent from a day ago. The chart of the first cryptocurrency of the week looks like this.
Most coins from the top ten cryptocurrencies by market cap are also showing growth. For example, the Ethereum network token has grown by 13.8 percent per day, while the growth rate of ETH in a week exceeds 10 percent.
At the same time, some cryptocurrencies do not pay attention to the collapse of BTC at all. In particular, the native token of the high-speed blockchain Solana, called SOL, set a new all-time high at $ 48.46 tonight. Moreover, a month ago it cost $ 16.
In general, the current state of the market looks good. However, advanced investors bought bitcoins on a collapse – when many novice traders were afraid to open positions or even sold the asset in the red.
Who Buys Bitcoin?
Each of these wealthy investors holds between 100 and 1,000 BTC purchased at least a month ago. The chart published by Gradwell also shows other significant purchases of the “whales”, that is, the big players. For example, at a price of $ 55,800, a group of investors bought 229,000 BTC for $ 1.3 billion.
The expert also noted that most of these coins are listed on cryptocurrency exchanges, which means, in theory, they can be sold soon. Based on the plateau in the chart below, huge amounts of BTC have been spent within the $ 54K coin value. Gradwell clarified that a larger plateau on the chart could create a kind of support for the crypto market, below which the bears are unlikely to be able to quickly push through. Here is a quote from an expert in which he shares his vision of what is happening. The cue is from Decrypt.
As the price drops to the average acquisition cost, I would expect large investors to buy more coins, thereby keeping their value above a certain level.
This means that holders of large capitals have no doubts about the prospects for a niche of coins. Recall that against the background of the recent sinking of Bitcoin below 48 thousand dollars, many traders even began to suspect the market at the end of the growth stage. However, altcoins against the background of the subsidence of BTC dominance clearly hint at the opposite situation.
The news of the fall in BTC added confidence to the statements of Nassim Taleb – the writer and author of the famous book “Black Swan”. The day before, in an interview on CNBC, Taleb called Bitcoin a “financial pyramid”. Here is his line.
There is no link between inflation and cryptocurrency. If you want to hedge against inflation, buy a piece of land and grow, I don’t know, olives on it. If the price of land falls, you will at least have olive oil. It doesn’t work with Bitcoin.
That is, the writer does not understand the value of decentralization and the opportunities that cryptocurrencies open up. That is why he perceives them exclusively as an instrument of financial speculation and payment for illegal substances. At the same time, the latter point of view has long ceased to be relevant.
According to Taleb, as the capitalization of the cryptocurrency market grew above the trillion dollar mark, its behavior became highly dependent on the situation in the stock market. Against the backdrop of the policy of supporting the economy from the US government, the stock market over the past year has grown to new all-time highs, and Bitcoin has practically copied its movement. This means that with the new turmoil in the economy, BTC holders are unlikely to be immune to a major fall.
At the same time, we believe that such statements seem relevant simply due to the fact that at the moment the market is at the stage of correction. Recall that the maximum Bitcoin rate at $ 64,804 was recorded on April 14. Today, the value of the asset lags behind its record by 18.4 percent.
Cryptocurrencies are also extremely volatile, meaning they fall as easily as they rise. The writer continues.
These gimmicks, of course, you have Bitcoin today, you may have something else tomorrow – they come and they go, and there is no systematic connection between them and the promises that are put into them.
Taleb hasn’t always been against Bitcoin. Back in 2018, he stated that BTC could become a sane alternative to the policies of world governments. However, relatively recently, the author of “Black Swan” posted a tweet in which he stated “the failure of the Bitcoin mission.”
We believe that Nassim Taleb’s remark does not reflect the real position of cryptocurrencies in the world. Nevertheless, representatives of Tesla, MicroStrategy and other world giants openly buy bitcoins for huge amounts, which means they have already managed to consider the value of the cryptocurrency. However, it is quite difficult not to do this, given its decentralization, limited maximum supply and gradually decreasing emissions. Therefore, in this situation, the actions of investors seem more logical than criticism of the writer.