- image source : coingape.com -
The bitcoin price clocked a new all-time high earlier this month, topping $67,000 per bitcoin. Meanwhile, ethereum, the second-largest cryptocurrency after bitcoin, has also recorded an all-time high this week, climbing to over $4,400 per ether.
Bitcoin’s rally, adding $20,000 to the price of just one bitcoin, has been put down to big bitcoin holders (known as whales) adding to their stacks—with crypto analysts finding supply shocks “have only grown stronger.”
“The supply shock brought by long-term [bitcoin] holders last month has only grown stronger this month,” Pete Humiston, manager at the research arm of a crypto exchange Kraken, wrote in a report. With newly created coins being hoarded, the bitcoin price has risen as demand outpaces supply.
The weekly average holdings of whales has risen 0.25% since early October, hitting a record $724.4 billion, Kraken found. Meanwhile, the number of such holders increased 1.6% to 16,156, the highest level since May. Humiston told Coindesk that “both large-scale entities and smaller players, who secure the network via mining pools, appear to be stockpiling bitcoin.”
Humiston reported that only a small number of so-called miners—who use high-powered computers to secure the bitcoin blockchain in return for freshly-minted coins—are selling, despite the bitcoin price hitting an all-time high.
Larger market participants have grown increasingly more confident, preferring to accumulate further than to take profit,” according to the report. “With the number of whales and whale holdings rising, it is clear that whales are a driving force in this latest run-up and remain optimistic.”
Kraken’s report chimes with recent research that found the vast majority of bitcoins are owned by a relatively small group. Last week, researchers said they’d found bitcoin remains concentrated among a handful of holders, warning this makes “bitcoin susceptible to systemic risk.”
“Our results suggest that despite the significant attention that bitcoin has received over the last few years, the bitcoin ecosystem is still dominated by large and concentrated players, be it large miners, bitcoin holders or exchanges,” analysts from the National Bureau of Economic Research wrote. ( source : Forbes.com )
- This is for educational purpose and not considering financial advice.