Long-Term $BTC Holding and Investor Confidence Hit New Heights
MIM #15: Staked $ETH spikes by over 4 million, crypto hacks down by 70% last quarter, and celebrating the best Bitcoin holiday
Usually, we start this newsletter by talking about some coin rising so quickly it blasts through the ceiling of whatever basement it was created in. That or marveling at the new ground made by our decentralized overlord, Bitcoin.
However, this week I think it’s important to highlight the stability our overlord has exhibited over the last few weeks. Bitcoin’s stable price of around $27,000 has brought peace to Satoshi City, and HODLers are gaining more confidence to lock up their assets for longer than ever because of it.
This stability is a bullish signal in its own right, hinting at Bitcoin’s decoupling from traditional assets and overall crypto market maturation. Data from Glassnode backs this up, with the proportion of $BTC held for at least a year reaching a record high of 68%.
Additionally, 55% of $BTC has been held for at least two years and 40% for three years. In contrast, the stock market has experienced a shift towards shorter holding periods for assets.
The trend indicates investors are holding Bitcoin rather than selling. The rise of long-term holding hints at potential price increases in the current cycle, and the reluctance of current HODLers to sell could lead to a supply squeeze.
A survey conducted at the Consensus 2023 conference reveals more good news. Investment managers, particularly those from traditional finance backgrounds, remain bullish on digital assets and intend to continue allocating capital to cryptocurrencies.
The survey gauged institutional investors’ and asset managers’ perspectives on the crypto market. 70% of institutional investors and 95% of managers expressed a favorable view toward crypto investing.
It also explored the timeline for large-scale institutional investments in the crypto market. 32% of institutional investors believed such investments were already underway. 16% anticipated it within the next 1–3 years, and 36% predicted it within 3–5 years.
The questionnaire then quizzed experts on the likely catalysts for further crypto investment. Roughly 60% of both groups identified clear regulation as a primary catalyst. Second, the availability of good investment opportunities at 30%.
The findings indicated that 2022 did not alter institutional sentiment toward crypto. Yet, these events did prompt many investors to enhance their due diligence processes.
Most institutional investors considered BTC a store of value and a portfolio diversifier. Both groups selected the tokenization of funds and real assets as the most exciting investment theme over the next year.
Data from Glassnode and opinions in the Consensus survey highlight the same thing — Bitcoin’s underlying value remains despite external factors. Both forecast a promising future for the industry’s flagship coin. Now, enough about Bitcoin. Here is the news from the crypto market, starting with the protocol prince, Ethereum.
Last week’s crypto news
- The quantity of $ETH staked has surged by 4.4 million to 22.58 million, since the implementation of the Shanghai upgrade on April 12. This increase in staking interest is likely driven by large Ether holders seeking passive income rather than selling their tokens. The demand for staking is expected to continue due to anticipated price growth for Ether. The Shapella upgrade has made staking less risky by allowing users to unlock their coins at will, which has attracted more investors. Despite a month-long waiting time, more than 50,000 potential validators are in the queue. The annualized yield for staking ETH now ranges from 4% to 5%.
- According to a report by TRM Labs, attacks on token protocols and crypto projects decreased by 70% in Q1 2023 compared to the same period in 2022. The stolen amount during this time was lower than in any quarter in 2022, indicating improved security measures and a decline in easy exploits. The average hack size decreased to $10.5 million from nearly $30 million in Q1 2022. Victims of hacking incidents in Q1 2023 were able to recover over half of the stolen funds. The decline in crypto hacks is attributed to enhanced cybersecurity practices, stricter regulations, and increased collaboration among industry participants.
- Conflux Network ($CFX), known as the “Chinese Ethereum,” experienced a surge in token prices following Hong Kong’s decision to allow retail investors to trade cryptocurrencies. This move is expected to attract capital from Chinese investors. Conflux claims to be the only regulatory-compliant public blockchain in China. It has collaborated with various global brands and government entities on blockchain and Metaverse initiatives. Conflux plans to launch a pilot program for blockchain-based SIM cards in Hong Kong and other locations in mainland China. Due to its ties to the Chinese market, some investors consider $CFX a proxy bet on the broader Asian market. The market capitalization of Conflux has risen from $46 million to nearly $650 million this year, making $CFX one of the best-performing tokens.
4. Shibarium network’s testnet, Puppynet, has recorded over 11 million transactions, indicating increased activity as it prepares for its mainnet release later this year. The testnet, launched on March 11, has processed transactions from nearly 15 million wallets, with a significant surge in activity in the past week. Puppynet aims to address scalability, speed, and cost issues by operating as a layer 2 network on top of Ethereum. It is expected to cater to Metaverse, gaming applications, and the NFT sector. The development of Shibarium and its associated ecosystem tokens (SHIB, LEASH, and BONE) could enhance the fundamentals of the Shiba Inu project, which started as a meme coin but has evolved into its own DeFi ecosystem. Currently, the combined market capitalization of the three tokens exceeds $5 billion. It’s nice to see the industry’s top meme coins providing token holders with value!
Magic’s parting thoughts
Remember how I threw out the idea of making Satoshi Nakamoto’s so-called birthday a crypto holiday? Well, last week, the community celebrated the best established holiday for Bitcoiners across the world! We collectively united and rejoiced for the one and only Bitcoin Pizza Day!
Who needs a day dedicated to eating leftover turkey when you can honor the most mouthwatering transaction in crypto history? Bitcoin Pizza Day is a time to gather ‘round the wood stove and share tales of the brave soul who exchanged a whole bunch of $BTC for a delicious pie. Some of you are probably wondering what the DOGE I’m talking about, so let me fill you in.
On May 22, 2010, Laszlo Hanyecz made history by paying Jeremy Sturdivant 10,000 $BTC for the delivery of two Papa John’s pizzas to Hanyecz’s home. This event is widely recognized as the first-ever commercial transaction using Bitcoin, making it a significant milestone in the cryptocurrency’s history.
However, there is often a misconception and criticism surrounding this transaction. Detractors argue that Hanyecz made a foolish decision since if he had held his $BTC, they would be worth over $270 million today, rather than just two pizzas.
While it is true that 10,000 $BTC holds immense value today, back in 2010, it was a different story. Bitcoin was still in its early stages, and its value had not yet skyrocketed. The significance of Bitcoin Pizza Day lies in the fact that it demonstrated the use of Bitcoin in a real-world transaction and contributed to its adoption and growth.
Therefore, we should appreciate and acknowledge the contributions of Laszlo Hanyecz and Jeremy Sturdivant, the pioneers, for their role in kickstarting the Bitcoin economy. Their transaction laid the foundation for Bitcoin to gain real monetary value, a development that all Bitcoin enthusiasts should be grateful for.
It’s essential to understand that the value of Bitcoin relies on people using it as a means of exchange. If no one had ever used Bitcoin for transactions, it would have no practical value. Bitcoin Pizza Day serves as a reminder of this fundamental aspect.
Just think of what this holiday could evolve into. Bitcoin Pizza Day parties, where we’ll feast on slices and trade crypto anecdotes. And the traditions! We’ll have the Best Pizza Toss competition, where contenders hurl their dough high in the air while screaming, “To the moon!” So, my fellow crypto aficionados, let’s band together and make Bitcoin Pizza Day the greatest holiday known to the blockchain.
May every slice be topped with success, every transaction be as seamless as a perfectly melted cheese pull, and every celebration be a wild, pepperoni-fueled extravaganza! Who’s with me?
Ok, I’m getting carried away now. That’s all for this week, Speedsters. I’m heading to Papa John’s. All that pizza talk is making me hungry!
