Long-Term Investors Hold Most of the Bitcoin Supply

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Long-term investors now hold nearly 80% of the estimated available bitcoins. This massive demand, and less speculation, is likely the reason that Bitcoin outperformed all assets in 2020, returning its investors north of 600%, according to a new report.

See: Americans’ Savings Drop to Lowest Point in Years
Find: Tesla Buys $1.5 Billion in Bitcoin, Says It Will “Soon” Accept It as Form of Payment

“Though it has taken over 10-years for the cryptocurrency community to prove one of Bitcoin’s key points, the value in real scarcity is now taking shape. What can finally be seen is that market supply pressures have been driven primarily by North American institutions,” notes the report by Copper.co.

Just last week, Elon Musk said Tesla had bought $1.5 billion bitcoin and that it would soon accept the cryptocurrency as a form of payment.

“The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable,” Tesla said in a Securities and Exchange Commission filing.

See: PayPal Finally Welcomes Bitcoin, More Cryptocurrencies
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Institutional investors have also taken a keen interest in Bitcoin lately. The cryptocurrency got a boost earlier this year by being backed by big name investors like Paul Tudor Jones and Stanley Druckenmiller. S&P Global also announced earlier this month that it will launch cryptocurrency asset indices in 2021 — further proof that Bitcoin is going more mainstream. The index provider said it was partnering with Lukka, a leading New York City-based crypto asset software and data company.

Other big names have jumped on the Bitcoin bandwagon, including Ray Dalio, founder of Bridgewater Associates, one of the largest hedge funds with $138 billion in assets under management. In a note published on the firm’s website, last month, Dalio said he believes Bitcoin is “one hell of an invention.”

Copper.co notes that Bitcoin kicked off 2020 at just over $7,000. As of today, it stands at just shy of $48,000. “Even a global pandemic couldn’t suppress prices for too long,” the report says.

See: Crypto Bubble Brings a Curious Problem for Investors
Find: Musk Tweets Again and Dogecoin – a Bitcoin Rival – Skyrockets

The total number of available bitcoins is limited to 21 million, which should be reached in 2140.

“In fact, if one removes the bitcoin that is estimated to be lost forever and the remainder that is to be mined well into the next 120 years or so, long-term investors now hold a whopping 79% of the cryptocurrency,” Copper.co says in the report.

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“With 11.7 million bitcoins held by long-term investors, markets are now reliant on just 3.2 million available on exchanges and carried predominantly by traders.”

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

Long-Term Investors Hold Most of the Bitcoin Supply
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