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The smallest holders of Bitcoin (BTC) are investing in the asset at an unprecedented rate this month, indicating a collective optimism within the Bitcoin market for 2023.
On-chain analytics reveal that “shrimps” – Bitcoin addresses with less than 1 BTC – have not accumulated at this intensity in almost six years.
Small Holders Accumulate Their Sats
As per Lead Glassnode Analyst James Check on Twitter, shrimps are currently acquiring an average of 33,800 BTC each month. This figure exceeds the monthly issuance of new BTC by the network, which stands at 27,000 BTC.
“For every 1 new coin, Shrimp are taking 1.25 off the market,” Check stated. “Crazy conviction on display.”
In terms of BTC, the most rapid accumulation phase for shrimps occurred during the post-FTX panic, when Bitcoin’s price fell to a four-year low of $15,500. However, in dollar terms, Check observed that shrimps are purchasing Bitcoin at the highest rate since the peak of the 2017 bull market.
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“Five years later, they are stacking harder, faster, and in a more sustained manner, despite all the challenges,” he added. “Bullish.”
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At the same time, Bitcoin “crabs” – entities holding between 1 and 10 BTC – are accumulating an additional 22,400 BTC monthly, accounting for another 83% of the mined supply. In May 2023, the number of addresses with over 1 BTC exceeded 1 million for the first time.
Comparisons to mined supply are pertinent for those who believe that Bitcoin’s halving – an event that reduces the supply issuance rate by half every four years – is primarily responsible for the asset’s well-known four-year price cycle.
The next halving is scheduled for April 2024 – although some analysts are skeptical that it will necessarily trigger another bull market.
Indicators of Bitcoin’s Bullish Trend
In previous reports this year, Glassnode analysts have highlighted an “ongoing transfer of wealth from investors with high time preferences to HODLers.” The firm noted that over 50% of all BTC in circulation had not changed hands in more than two years as of this April.
Bitcoin’s price may be reflecting these underlying shifts, having risen by 83% this year and regained a market dominance above 50% in the crypto space.
Analysts are assigning significant probabilities to the market’s chances of securing a Bitcoin Spot ETF approval from the U.S. Securities and Exchange Commission (SEC) this year, which is anticipated to attract more investment into the asset.
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