Key Points
Bitcoin has surged past $59,000, drawing closer to its record high. This significant increase happened in the early hours of the day.
The rally was driven by strong inflows into spot ETFs. It resulted in a 13% weekly growth in Bitcoin’s market value and a monthly increase of over 37%, as per CoinMarketCap data.
Investor Profitability and Market Activity
This market surge has elevated the average profitability of Bitcoin investors to unprecedented levels. Analysis of Glassnode’s data reveals that investors were holding an unrealized profit of 139% at the time of writing.
This figure represents potential profits if participants decided to sell their coins. However, the actual profits realized also depict a positive scenario.
A recent Glassnode report indicates that on average, the market was selling coins at a 13% profit. Long-term investors who weathered the challenging bear market were selling at 2x profits. Meanwhile, short-term traders were also securing 2% profits on their sales.
Short-term holders (STH), also known as active market traders, have increased their exchange activity over the past month. Data shows STH sending $2 billion per day to exchanges since mid-January, reaching a new all-time high of $2.46 billion.
This group has been transferring over 1% of their supply daily since October 2023. The increased participation of the STH group suggests a growing risk appetite in the market.
Conversely, long-term holders (LTH) made significantly fewer deposits. This is expected as these investors, often referred to as “diamond hands”, are trying to accumulate from a rapidly depleting supply.
Despite selling a considerable portion of their holdings in the last month, the LTH group still holds three-quarters of Bitcoin’s supply. This numerical advantage gives them the power to influence the duration of the bull run.
Over time, Bitcoin’s reputation as a store of value has strengthened. Given the supply/demand dynamics in its favor, it wouldn’t be surprising to see “diamond hands” holding onto their Bitcoins indefinitely.
