59% of Bitcoin Holders Are Sitting On Profits

Dalmas Ngetich

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

59% of Bitcoin holders are profitable as the coin trades above the current Realized Price, which is the cost basis of the average BTC holder, IntoTheblock data on January 19, shows.

Parallel on-chain streams show that the realized price of Bitcoin is around $19,700. Comparing this number with the spot BTC price presently at over $20,700, it means 59% of coin holders are sitting on profits, a net positive for the ecosystem.

This development is a shot in the arm for HODLers, considering the sharp contraction of prices over the past few months. Then BTC plunged from around $69,000 in November 2021 to slightly over $15,000 in 2022.

Bitcoin Price chart Chart: TradingView.com — Bitcoin Price Chart Chart| Source: BTCUSDT on TradingView.com

On-chain data are crunched in real-time, and analysts interpret them to gauge the state of the market. Their interpretation, in turn, could massively influence sentiment and determine how retail traders act based on price action.

As BTC prices react from $21,600 posted earlier this week, on-chain statistics show more than half of BTC holders are in green. Only 38% of market participants are out of the money.

Bitcoin holders in the money: Source: IntoTheblock

Most Bitcoin Holders Have Been In The Red

Even as BTC appears to recover, there must be a comprehensive breakout to solidify and revive demand. Based on the recent Bitcoin price action, most holders appear to be in the green after an extended period of losses.

Trackers show that holders have been in losing territory since mid-August 2022. The situation only worsened in subsequent months when fear, uncertainty, and doubt (FUD) swept across the crypto and BTC markets, forcing the coin even lower. This draw-down was because of the unexpected collapse of FTX, a cryptocurrency exchange, and Alameda Research, a trading firm closely associated with the Sam Bankman-Fried exchange.

By early November, BTC had dropped by over 65% from 2021 peaks, highlighting the level of apprehension across the board, pushing the Realized Price even lower.

Realized Versus Market Price

Realized Price is a metric that measures the price of all BTC currently in supply at the rate they were bought. The value obtained is then divided by the BTC in the circulating supply.

The result gives an “average cost basis” which is then used to describe the Realized Price. It is different from the spot market price because the latter indicates Bitcoin’s current price based on real-time supply and demand. Like any other asset, BTC prices are massively determined by market forces, with the “hype” element, describing sentiment, another factor to consider.

That more than half of Bitcoin holders are profitable at spot rates is important. Realized Price helps judge the overall economic state of the Bitcoin market. How this metric fluctuates versus the market price tells whether BTC holders are buoyant or distressed. In technical analysis, the Realized Price can be used to mark resistance or support levels.

Technically, whenever the Realized Price exceeds the Market Price, it indicates some BTC holders are in profit. If it drops below Market Price, then on aggregate, a section of market participants is in red. Profitability depends on the price level they bought.

Featured image from Flickr, Charts from TradingView.com

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.