Bitcoin Supply Surges Among Long-Term Holders, Stable Price Amid Fed Rate Hike Anticipation

Bitcoin (BTC) has experienced a surge in supply held by long-term holders, reaching a new all-time high. Despite this accumulation by investors and the market's anticipation of another rate hike by the Federal Reserve, the cryptocurrency's price remains stable.

According to Glassnode, a blockchain data provider, at least 75% of Bitcoin's circulating supply, which is the world's largest crypto asset by market capitalization, is now held by investors who entered the market 155 days ago.

The data also revealed that long-term holders (LTHs) of BTC currently possess 14.52 million coins, setting a new all-time high. On the other hand, short-term holders and speculators hold the remaining 25% of the total circulating supply, which amounts to nearly 19.5 million Bitcoin.

"This suggests HODLing is the preferred market dynamic amongst mature investors," Glassnode said, adding that long-term holders have gradually increased their holdings over the previous month, even as the USD valuation of Bitcoin lingered around the $30,000 price level.

During the period leading up to the highly anticipated Bitcoin halving, the cryptocurrency maintained its position around the $30,000 threshold, displaying stability over the past 15 days and very little volatility over the last couple of weeks, according to Matteo Greco, a Research Analyst at Fineqia International, a publicly listed digital asset and fintech investment business.

"Bitcoin (BTC) closed last week at about $30,100, before breaking below the $30,000 threshold overnight. In the last 15 days, BTC price remained stable around $30,000, with some intraday volatility but overall, with almost no variation in price in the last two weeks evaluating the closing price," the research analyst told International Business Times.

Investors are now eagerly awaiting the next Federal Open Market Committee (FOMC) meeting scheduled for this Wednesday, with the general expectation being a 25bps rate hike announcement, according to the research analyst.

"After a big market bounce following the XRP ruling, digital assets found some price stability and investors are now waiting for the next FOMC meeting, scheduled for Wednesday this week. Investors' expectations are a 100% probability of a 25bps rate increase which is contributing to the pause in the current uptrend. The strong US jobs market still gives space to the US central bank to increase interest rates, which are expected to increase two more times before the end of 2023 as they keep pursuing the trend of declining inflation," Greco said.

The previous week saw several positive developments, including the official listing of spot Bitcoin exchange-traded fund (ETF) applicants to the Federal Register, which according to the Fineqia International research analyst, "contributed to the strong decline in the discount applied to the Grayscale BTC Trust (GBTC) that reached 25%, the lowest level since April 2022."

Greco told IBT that "the increased likelihood of a spot ETF approval is leading to the narrowing of the discount applied to the trust due to a rise in investors' expectations of seeing the product finally converted into a spot ETF after years of failed attempts by Grayscale."

He further pointed out that positive market sentiment is also evident in the behavior of long-term holders, with around 55% of Bitcoin supply remaining unmoved over the past two years, indicating an increase in long-term holding and a decrease in short-term speculation.

The research analyst also underlined that "despite a cautious attitude of investors in the short term, especially due to the rate hike expectations at the forthcoming FOMC meeting, the analyzed metrics concerning BTC and ETH suggest a period of accumulation, with investors buying digital assets and holding for a long period looking for a price increase in the long run."

As of 11:30 a.m. ET on Tuesday, Bitcoin was trading at $29,222.29, with a 24-hour trading volume of $10,650,798,789. This represents a 0.40% increase in the last 24 hours and a 7% decrease over the past seven days. Based on the latest data from CoinMarketCap, Bitcoin's total circulating supply stands at 19,438,881 BTC, and its value has increased by 0.37% with a market cap of $567,461,374,542.