Summary: In the month of September, Bitcoins kept flowing out of exchanges, whereas the percent of Ether stored on exchanges has not changed despite a large spike in deposits. For both Bitcoin and Ethereum, it seems that the circulating supply is rotating from institutional to retail investors.
Immediately upon interacting with a blockchain, much data becomes publicly available on a public ledger. Analyzing this data may provide crypto traders and investors with helpful insight into the present state of the market. In “The state of crypto”, we take a look at the most important metrics to observe the market based on transaction and trading activity. Our main focus is the two largest cryptocurrencies Bitcoin and Ethereum, and we divide the metrics into short-term and long-term indicators. You find the report for the last month here.
Bitcoin experienced a small net outflow from exchanges from around 9.1% to 8.9% of the total Bitcoin supply. This may indicate that fewer Bitcoin holders are considering selling in the imminent future. The supply of Ethereum on exchanges is identical at 14%. Yet, both cryptocurrencies were heavily deposited to exchanges during September likely due to the price declines alongside the increased volatility early in the month.
Despite the high volatility, it seems that fewer Bitcoins that had not been moved in 365 days were transferred in the past month. This may hint that most long-term Bitcoin holders are not interested in selling at these prices. On the contrary, more Ether were moved that had not been moved in 365 days, but this is likely mostly because of the Ethereum merge, at which event many Ethereum holders were more comfortable holding Ether on exchanges contrary to their own wallets.
For Bitcoin, the supply shifted from Bitcoin-rich wallets to wallets with fewer Bitcoins, as an increasing part of the total supply is kept by wallets storing between 0 – 10 BTC. In that connection, wallets containing between 10 – 1,000 and +1,000 BTC declined in importance, although they still store the majority of the total Bitcoin supply. Wallets storing between 0 – 10 ETH also rose in weight. This may suggest that retail investors are accumulating Bitcoin and Ether, whereas institutional investors are selling. If that is a correct observation, only time will tell which party is on the right track.
The circulating supply of Bitcoin and Ethereum that has been moved over the past 5 years continues to decline. This suggests that the circulating supplies are less than the total supply of both Bitcoin and Ethereum, since many no longer have access to their cryptocurrencies, minimizing potential sell pressure. More, it indicates that no large inactive whale has suddenly turned active by moving Bitcoins or Ether recently which could push prices down.
The average Bitcoin holder is estimated to be slightly less underwater than last month from 28.3% to around 26.5% in loss. Though, the price decline in Ether is estimated to have been tough to Ether positions, as Bitcoin and Ether holders are nearly as much underwater now.
The outflow out of exchange-traded crypto products e.g., ETPs and mutual funds has been rough to Ethereum. The second-largest cryptocurrency recorded an outflow of $65.1mn, whereas Bitcoin recorded a minor inflow equal to $3.2mn. Based on the outflow for Ethereum, it seems that “buy the rumor, sell the news” was also present in exchange-traded products in regard to the Ethereum merge.
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Fixed Income Strategy
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Commodity Strategy
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Fixed Income Strategy
Quarterly Outlook
Head of Commodity Strategy
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)