Glassnode Data show that Bitcoin retail traders are now braver and have been piling up even with prices falling for most of 2022.
Based on trends, an analyst notes that following the collapse of LUNA, the native coin of the Terra ecosystem, retailers have been hoarding more coins, holding out despite BTC prices plummeting from around $30,000 in May 2022 to less than $15,000 in November 2022.
LUNA’s fall was triggered by the unpegging of UST, an algorithmic stablecoin backed by, among other assets, BTC and LUNA.
Retailers are classified according to their holdings. Unlike institutional investors, who may be limited by law to purchase a certain number of coins using client funds, retailers use their investment based on their analysis to purchase the coins. In Bitcoin, retailers are people with less than 10 BTC.
Trackers now reveal that although BTC prices continued to decline from May 2022, the number of retail holders increased, diverging with prices. During the last bear cycle, the analyst notes that retailers found opportunities to accumulate on each dip.
Due to its resilience, the retail offer increased from around 12.7% to 17.1% in less than a year.
This development is markedly different from the events surrounding China’s ban on crypto mining activities. Then the number of coins in retail hands fell before rising.
Since May 2022, retail supply has increased, highlighting holder confidence in BTC and cryptocurrencies as an industry. Although there was a slight drop in retail share in November when FTX filed for bankruptcy, the number increased through December.
The second half of 2022 was especially difficult for cryptocurrencies and BTC due to the bankruptcy of CeFi platforms, including Voyager and BlockFi. Billions in crypto assets remain unrecoverable, causing an outflow from CeFi platforms to non-custodial wallets.
The resulting fear sent BTC to a low of $15,300 in Q4 2022, accelerated by the FTX bankruptcy and the revelation that Sam Bankman-Fried misused user funds through Alameda Research. , a trading company associated with the now-defunct exchange.
Bitcoin prices are currently trade at pre-FTX crash levels, at over $23,000.
