Glassnode: Bitcoin wealth redistribution, long-term holders take profits, new investors absorb supply

According to a recent report by glassnode, the sustained bull market in Bitcoin signals a significant shift in wealth from long-term holders to new investors, which is a sign of the Bitcoin market's maturity. Long-term holders have been realizing record profits, reaching a peak of $2.1 billion per day, while new investors have sufficient demand to absorb this supply. The report indicates that this trend shows the increasing depth and diversity of the Bitcoin ecosystem, driven by increased institutional participation and growing retail interest. In 2024, long-term Bitcoin holders (particularly those holding Bitcoin for 6 to 12 months) are expected to be the main contributors to selling pressure. These tokens were primarily acquired earlier this year and account for 38.5% of the $27.3 billion in realized profits since November. Meanwhile, Bitcoin held for more than three years is relatively dormant, suggesting that higher price levels may be needed to stimulate its sale. The report notes that this is a natural cycle in the Bitcoin market. As prices rise, long-term holders distribute wealth, allowing new investors to absorb the supply. Despite the large profit-taking by long-term holders, new investors have shown resilience, providing the liquidity to sustain Bitcoin's upward momentum. Metrics related to short-term holders (STH) highlight their ability to withstand market adjustments without triggering a cascade of sell-offs. Furthermore, the current Bitcoin cycle has seen lower volatility compared to previous bull markets. The maximum drawdown in August was 32%, significantly lower than the adjustments in previous cycles. Analysts attribute this stability to increased institutional participation, as well as the launch of spot Bitcoin ETFs and the widespread adoption of digital assets, which have driven this trend. In addition to the buying pressure from new retail investors, this institutional demand has greatly supported the market, ensuring liquidity during sell-offs and supporting price resilience.