If you look at 2018 for Bitcoin, you would think that big cash outs will never happen again. Investors took the huge winnings from 2017 and moved on. Those who started selling in 2018 cut their losses and moved on.
According to a research from the data analytics firm Chainalysis, that doesn’t seem to be the case. It appears that many people still keep bitcoins in their possession. That number has steadily increased during 2018. The data also shows that the number of companies involved has drastically declined.
The analysis also found that around 32% of bitcoins or around nearly 5 million, are held by individual users. The coins are held in personal wallets and there are ongoing transactions. Last year, during the highest point of the crypto craze, 26% or 3.8 million bitcoins were owned by individuals. This is a huge increase for a 1-year period.
These increases a good sign, but what about the next big cash outs? The markets will inevitably present an opportunity for a huge sell off. In the event of a crash this sell off will be far more serious for individual users. In the event of a rally many companies will quickly try to hop on the bandwagon and will further force many users to sell.
There are already a number of technical innovations worked on, that will help stabilize and further improve bitcoin. Lightning network is one such project. One issue, which can prove crucial in the next big cash out can be solved by the lightning network.
The painfully slow payment processing options for users and service providers can be solved. This will certainly be helpful in investors’ and users’ decisions on how to proceed during the next cash out.
Big cash outs can become huge and long-time holders stand to benefit the most
The analysis further proves that many people are still unsure how to proceed in the current market. Bitcoins are still held as an inactive investment. 6.3 billion are held into accounts, which show no activity in the last 12 months. This seems to be the case for wallets in the possession of both individuals and companies alike. This of course isn’t an entirely accurate display of the data since one person can hold multiple wallets.
This can be also viewed as a good trait. The deflationary supply is something most users believe to be a solid investment. Over the 10 years of its existence, bitcoin has proved that it only takes 1 year to drastically change the world financial landscape.
With the market maturing, it’s absolutely normal for things to settle down. Chainalysis has also shared that in the span of 3 months, bitcoins held by exchanges have increased by 93 000. For the same amount of time, over 1 million bitcoins have been added to personal wallets. This means that people, who use self-custody solutions are more than people who speculate.
Another key thing to look for as the market develops is the wealth disparity. The wealth distribution is very diverse thanks to long-term investors willing to sell during the big cash out last year. At the moment, there are currently over 28 million bitcoin wallets and around 150 000 of them, hold more than 10 bitcoins.
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