On-chain data shows the new whale entrants in the Bitcoin market now hold almost twice as much as the veterans. Here’s what could be behind this shift.
Bitcoin Newbie Whale Holdings Have Been Rapidly Growing Recently
In a new post on X, CryptoQuant founder and CEO Ki Young Ju has discussed about how the holdings of the new whales compares against the old ones in the market right now.
The on-chain indicator of interest here is the “Realized Cap,” which, in short, keeps track of the total amount of capital that the investors have used to purchase their Bitcoin.
This capitalization model is in contrast to the usual market cap, which simply measures the total value that the holders as a whole are carrying based on the current spot price.
In the context of the current topic, the Realized Cap of the entire market isn’t of interest, but rather specifically that of two segments: the short-term holder whales and long-term holder whales.
Whales are defined as entities on the network who are holding at least 1,000 BTC in their balance. At the current exchange rate, this amount is worth $66.6 million, so the whales are clearly quite massive holders. Because of these large holdings, these investors can hold some influence in the market.
Based on holding time, the whales can be subdivided into two categories. The short-term holder (STH) whales are those who acquired their coins within the past 155 days, while the long-term holder (LTH) whales have been holding since longer than this timespan.
Now, here is the chart shared by Ju that reveals the Realized Cap breakdown between these two Bitcoin whale cohorts:
Looks like the metric has shot up for the STH whales recently | Source: @ki_young_ju on X
As is visible in the above graph, the Realized Cap of the STH whales has historically not been too different from that of the LTH whales, but that appears to have changed recently.
The metric has pulled away for these new whales this year with some very sharp growth, as its value has now reached the $110.6 billion mark. This means that the STH whales have collectively bought their coins at an initial investment of a whopping $110.6 billion.
The Realized Cap of the LTH whales, on the other hand, has continued its usual trajectory, floating around $66.9 billion currently. This means that there is now a massive gap between the indicator for these two cohorts.
But what’s the reason behind the sudden emergence of this brand-new trend? As mentioned before, the STH cutoff stands at 155 days, which means that the Realized Cap of the STH whales would signify the total value of the purchases made by the whales over the last five months.
In the past five months, there has been one event in particular that has stood out, which has also never been present in any of the prior cycles: the approval of the spot exchange-traded funds (ETFs).
The spot ETFs provide an alternative mode of investment into the asset through a means that’s familiar to traditional investors. These funds have been bringing in some unprecedented demand into BTC and as their holdings also fall under the 155 days mark, they would count as STH whales.
Bitcoin has also been rallying this year, so all this new investment would have had to purchase at relatively high prices, thus causing the Realized Cap, which correlates to direct capital flows, to inflate even further.
BTC Price
Bitcoin is now trading at $66,400 after witnessing a surge of more than 6% over the past week.
The price of the asset seems to have been overall consolidating sideways recently | Source: BTCUSD on TradingView