The Practice of Hodling Bitcoin Is Up, Up, Up
The amount of hodling that is occurring in the bitcoin space has increased tenfold. According to a new chart unveiled by Unchained Capital, the number of bitcoin holders that haven’t moved their digital funds over the past year has surged to an all-time high.
Hodling Has Reached an All-Time High
This makes perfect sense when one considers the economic conditions people everywhere are facing. The coronavirus pandemic has caused major shifts in global economies. Fiat currencies have lost much of their stamina over the past several weeks, with the U.S. dollar experiencing massive drops that have taken it to new lows.
As a result, many are looking to assets like bitcoin, gold and others as means of keeping their wealth hedged against economic problems such as inflation. Many see bitcoin as a way of diversifying their portfolios and keeping their money secure. Several cryptocurrency exchanges, such as Coinbase, even reported $1,200 purchases of bitcoin and other forms of crypto earlier in the year after stimulus checks were issued to Americans that made less than $75,000 per year.
These stimulus checks were worth approximately $1,200 each. Thus, it’s no coincidence that such amounts were also purchased via the exchanges and platforms in question.
The chart goes into detail regarding some of the specific behaviors of bitcoin holders. Whenever the price goes up, it is shown that most BTC fans sell or trade their coins for either USD or USDT (Tether, a popular stable currency). However, whenever the currency’s price goes down, hodling goes up, as people tend to keep their coins secure within their digital wallets, refusing to move any funds until the coin shows signs of potential recovery.
The currency may be doing well as of late. The asset recently rose above the $11,000 mark and is jumping a bit everyday (at the time of writing, it’s currently trading for about $11,300). However, for the most part, the currency has been on shaky ground throughout much of 2020. For example, the asset ultimately dropped into the high $3,000 range last March despite trading for well over $10K a month earlier in February.
Things Were a Bit Shaky Before
Even when the currency was presumably doing well – for example, the asset jumped past the $9,000 mark again in early May – things weren’t entirely assured. A week later, the currency moved past $10K but only briefly, likely due to hype surrounding its third halving. It later dropped back into the $9,000 range, which gave traders some concern regarding where and how the coin would move next.
This would later happen again in early June. The currency would move past $10K only for a few hours, leading many traders to believe BTC wasn’t strong enough to warrant sales or future trades. Thus, keeping their stashes in place and not touching any of the money in question was likely the best option.