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Holding Bitcoin: A profitable affair 88.5% of days

Bitcoin’s historical price performance confirms that a hard limit on total supply and seamless global usability is critical to becoming a store of value.

Of the 4,593 days of Bitcoin’s existence as a tradable asset, BTC hodlers experienced 4,065 profitable days — challenging the historical narrative of depreciating volatility in crypto. As a result, holding Bitcoin (BTC) is provably profitable in the long run. 

Bitcoin’s historical price performance confirms that a hard limit on total supply and seamless global usability is critical to becoming a store of value. Data from Blockchain.com shows that Bitcoiners enjoyed 88.50% of profitable days relative to the current market price at the time of writing.

Number of days in which holding bitcoin has been profitable, relative to current price. Source: Blockchain.com

As shown above, just 531 or 11.56% of the 4,593 days were unprofitable for long-term holders. The unprofitable days are between Dec. 28, 2022, and June 12, 2022, a time when Bitcoin was priced above the $26,246.58 and $28,344.5 range.

The revelation highlights the importance of understanding Bitcoin’s market cycles and why investors should avoid buying the tops and selling the dips. However, some traders prefer making daily trades on crypto exchanges for much smaller but consistent profits.

In a recent publication, Cointelegraph detailed the different types of crypto investors and categorized them based on their investment mindset. As mentioned, there are four main categories of mindsets of crypto bag holders: maximalists, hodlers, fomoers and traders. Read more to find out which one you are.

Related: Crypto Fear and Greed Index hits highest level since Bitcoin’s all-time high

In the Bitcoin ATM ecosystem, manufacturer General Bytes closed down its cloud services after discovering a “security vulnerability” that allowed an attacker to access users’ hot wallets and gain sensitive information.

“We’ve concluded multiple security audits since 2021, and none of them identified this vulnerability,” General Byes founder Karel Kyovsky concluded as he made the announcement.

Understanding crypto bag holders and their mindset

The freedom to stick to what makes the most sense financially sprouted various classes of investors, each distinguished by their intent behind crypto investments.

For the first time in centuries, paper money, or fiat, found its true competition in the internet era. When Bitcoin (BTC) debuted in 2009, the fiat ecosystem was not only challenged with proving its worth in day-to-day transactions but also safekeeping the investment ecosystem it helped build.

Over the years, the crypto ecosystem attracted people from all walks of life, serving their unique financial needs while filling the gaps left wide open by the fiat ecosystem. While most of the world watched from the sidelines — trying to decipher the true potential of cryptocurrencies — the first batch of Bitcoin millionaires swayed investors’ attention toward the budding ecosystem.

The freedom to stick to what makes the most sense financially sprouted various classes of investors, each distinguished by their intent behind crypto investments. Based on the overall approach taken by investors, there are four main categories of mindsets of crypto bag holders: maximalists, hodlers, fomoers and traders.

Maximalists

From the day Bitcoin showcased its cross-border supremacy after being used as a currency on the dark web, numerous investors witnessed a true peer-to-peer monetary system for the first time. What followed was a pledge to stick with Bitcoin and see it overpower the centralized entities, bringing power back into the hands of the people.

This total support for Bitcoin and the belief that BTC is the only true replacement for the fiat economy gave birth to the term Bitcoin maximalism. Bitcoin maximalists have, time and again, advised the community members to hodl their assets during the bear market. They often recommend buying the dip — a process that involves investing in crypto during the market’s poor performance. And over the last decade, the recommendation checks out.

However, maximalism is not limited to Bitcoin. It has spread widely across other crypto ecosystems too. Investors and crypto enthusiasts that have committed years to the growth of their preferred blockchains and cryptocurrencies have a belief pattern similar to Bitcoin maxis. Ether (ETH), Dogecoin (DOGE), Shiba Inu (SHIB) and XRP (XRP) are the few leading cryptocurrencies that have garnered loyal maximalists over the years that continue to preach the strength of their respective tokens.

HODLers

Hodlers are the type of crypto investors that believe in making long-term investments. This type of investor does not fear the infamous volatile market fluctuations and instead focuses on accumulating cryptocurrency tokens over time.

Hodlers can be found across all crypto ecosystems and are known to be the most resilient of the bunch. For new Bitcoiners, the dream behind hodling is to accumulate at least one BTC over time. Through many halving cycles and the resultant scarcity, Bitcoin hodlers envision a future when their investments shell out a return unimaginable in a traditional fiat setting.

This dream seems more attainable for other cryptocurrencies considering that investors can accumulate a big bag of tokens using comparatively lower funds. Some millennials and generation z’ers prefer purchasing thousands of meme tokens in the hopes of hitting the jackpot during bull markets.

FOMOers

Fomoers are a subset of investors that end up making the biggest mistakes in investing. Fomo is an abbreviation of “fear of missing out,” implying a feeling of apprehension related to price movements.

Fomoers tend to react adversely to every market condition. When the price of cryptocurrencies goes up, these investors purchase more tokens hoping that the prices will continue to rise. However, this approach does not always yield fruitful results. As a result, they often end up buying the top and selling the bottom.

Related: Is it possible to achieve financial freedom with Bitcoin?

To get out of this mindset, one needs to study the market extensively while putting aside the noise of misinformation. Moreover, prominent crypto entrepreneurs often recommend against fomo-ing and ask the general public to focus on the bigger picture.

Traders

These are the most straightforward investors that primarily focus on day-to-day prices in search of opportunities to earn profits. Traders closely monitor market sentiment, new developments and regulations to gauge how the markets react.

Regardless of the prices going up or down, traders are ready to cash in on the market fluctuations by longing or shorting trades. The need for liquid tokens for trading requires traders to store a significant amount of their assets on crypto exchanges. However, the FTX fiasco of 2022 is a reminder that self-custody is the ideal way of storing cryptocurrencies.

In reality, every type of crypto holder can potentially make a lot of money buying and selling cryptocurrencies if they know the real strategy. Check out how Cointelegraph Markets Pro members managed to make 120x returns with the help of advanced machine learning algorithms and news indicators for trade opportunities.

Hodlnaut creditors reject the restructuring plan, prefer liquidation

Hodlnaut downplayed its exposure to the Terra ecosystem, but an investigation into the embattled crypto lender shows it lost $190 million in the Terra crash.

The Singapore-based crypto lender Hodlnaut is looking at a possible liquidation as the firm’s creditors have rejected the proposed restructuring plan and seek liquidation of the platform’s assets.

The group of creditors rejected a restructuring plan offer allowing the current directors to oversee the firm’s operations during the restructuring phase. However, a Jan. 12 hearing rejected an application to remove the interim judicial managers, reported Bloomberg.

Cast your vote now!

The creditors believe restructuring plans are of no help and it is in their best interest to wind down and liquidate the firm’s remaining assets. Algorand Foundation, one of Hodlnaut’s key creditors, called for immediate liquidation and distribution of remaining assets among creditors to maximize the remaining value.

Hodlnaut’s trouble first surfaced in August 2022 when the firm suspended withdrawals, citing volatile market conditions and a lack of liquidity. However, it was later revealed that the crypto lender downplayed its exposure to the collapsed Terra ecosystem and lost nearly $190 million. The executives later deleted thousands of documents related to their investments to hide their exposure.

Related: Winklevoss slams SEC charges against Gemini as a ‘super lame … manufactured parking ticket’

The crypto lender sought judicial management under Singapore law to avoid forced liquidations. The firm was eventually placed under a creditor protection program in August, hoping to utilize the management period to restore its asset-to-debt ratio to 1:1 and allow users to withdraw their initial cryptocurrency deposits. However, the government-aided judicial management program didn’t help its cause for long.

Later in November 2022, the firm’s founders were probed for downplaying their exposure to specific crypto tokens and misrepresentations of facts. The investigation was based on several complaints from investors between August and November 2022.

Hodlnaut and Algorand Foundation didn’t respond to Cointelegraph’s request for comments as of publication time.

Crypto Stories: How Bitcoin helped a couple start a family

These Bitcoiners from London have “no regrets” about their decision to sell Bitcoin to start a family.

Bitcoin (BTC) gains helped “Noodle,” a London-based Bitcoiner, to afford in vitro fertilization (IVF) treatments for his family. Noodle’s story comes to life in the latest edition of Cointelegraph’s Crypto Stories.

IVF treatments can be expensive, with success rates ranging from 4% to 38%, depending on various factors. Fortunately, profits from buying and holding Bitcoin provided the necessary funds for Noodle to start a family.

Noodle, who first heard about Bitcoin in 2012, decided to sell some of his BTC to pay for IVF treatment for his wife. He favored selling BTC over taking out a loan, converting over $70,000 in Bitcoin into fiat currency over a few years to pay for the treatments.

Noodle’s journey with Bitcoin began when he was at the gym. An acquaintance introduced him to the Silk Road, a now-defunct marketplace where users could buy and sell various items using BTC. Noodle was convinced to buy 7 BTC at $57 each and ended up using it to buy cannabis online.

From that point on, Noodle fell down the rabbit holes of finance, education and the world of Bitcoin. He even convinced his wife, whom he had been with since 2008, to invest some of their wedding money into Bitcoin. Little did they know, this investment would eventually fund IVF treatments to help them have children.

Related: Crypto Stories: Dr. Adam Back shares his life of hacks

Despite the initial stigma around IVF, the Noodle family was able to have two children thanks to the profits from their Bitcoin investment. Noodle told Cointelegraph that he has “no regrets” about his decision to sell BTC to start a family and emphasized the importance of being able to make informed financial decisions.

For many people, the decision between holding Bitcoin or using it for practical purposes can be a difficult one. However, for Noodle, the choice to sell was a clear one, and he is grateful for the opportunity that his Bitcoin investment provided.

Bitcoin accumulation addresses near record 800K despite whale selling

Someone has been accumulating BTC throughout the 2022 Bitcoin bear market, and the trend shows no sign of reversing.

Bitcoin (BTC) accumulation is nearing a new milestone this Christmas as the redistribution of the BTC supply continues.

Data from on-chain analytics firm Glassnode shows that the total BTC balance of so-called “accumulation addresses” is nearing all-time highs.

“HODL-only’ BTC addresses climb closer to 1 million mark

Behind the scenes in the 2022 Bitcoin bear market, certain entities are in no doubt about their BTC investment strategy.

According to Glassnode, Bitcoin accumulation addresses are more numerous than ever before, while the BTC balance they contain is almost at a record high.

“Accumulation addresses are defined as addresses that have at least 2 incoming non-dust transfers and have never spent funds,” the firm’s description explains.

Glassnode adds that exchange wallets and those belonging to miners are excluded from the tally alongside addresses last active more than seven years ago, as funds they contain could be lost — permanently cut off from circulation.

Bitcoin accumulation address balance chart. Source: Glassnode

Despite this, accumulation addresses contained a total of 3,099,828 BTC as of Dec. 25.

That number is increasingly closing in on the all-time high of 3,403,280 BTC seen in August 2015. Since Christmas 2021, the accumulation address balance has increased by around 18%.

As of Dec. 25, there were a total of 793,591 qualifying accumulation addresses.

Bitcoin accumulation addresses chart. Source: Glassnode

“Bullish” whale selling?

Meanwhile, on-chain analytics platform CryptoQuant argued in a separate analysis that despite larger hodlers reducing their BTC exposure, the overall long-term trend remained bullish.

Related: Bitcoin exchange withdrawals sink to 7-month low as users forget FTX

“Larger (whales) holders selling into smaller holders (retail) is really want YOU want to see if you believe in a longer-term Bitcoin thesis. Bitcoin becomes more distributed on the network. It is on the hands of more investors other than in the hands of a few whales. And that is only a good thing,” contributor Maartunn wrote in a blog post on Dec. 21.

“On the lower timeframe, this is still an on-going risk. But in the larger perspective, I am very confident this is healty for the bitcoin-network as a whole.”

Accompanying charts showed changes in unspent transaction output (UTXO) value, with transactions worth between 0.1 BTC and 1 BTC markedly increasing in Q4.

Bitcoin UTXO value bands chart. Source: CryptoQuant

As Cointelegraph reported, an uptick in smaller BTC wallet numbers came as a result of the FTX implosion, with users rushing to remove coins from custodial exchanges.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Non-whale Bitcoin investors break new BTC accumulation record

Bitcoin addresses holding up to 10 BTC have been accumulating record amounts of BTC in the aftermath of the FTX collapse.

Some non-whale Bitcoin (BTC) investors seem to have had zero issues with the cryptocurrency bear market as well as fear, uncertainty and doubt (FUD) around the fall of FTX, on-chain data suggests.

Smaller retail investors have turned increasingly bullish on Bitcoin and started accumulating more BTC despite the ongoing market crisis, according to a report released by the blockchain intelligence platform Glassnode on Nov. 27.

According to the data, there are at least two types of retail Bitcoin investors that have been accumulating the record amount of BTC following the collapse of FTX.

The first type of investors — classified as shrimps — defines entities or investors that hold less than 1 Bitcoin, $16,500 at the time of writing, while the second type — crabs — are a category of addresses holding up to 10 BTC, $165,000 at the time of writing.

“Shrimp” investors have reportedly added 96,200 BTC ($1,6 billion) to their portfolios following the FTX crash in early November, which is an “all-time high balance increase.” This type of investor collectively holds 1.21 million BTC, or $20 billion at the time of writing, which is equivalent to 6.3% of the current circulating supply of 19.2 million coins, according to Glassnode.

In the meantime, “crabs” have bought about 191,600 BTC, or $3.1 billion, over the past 30 days, which is also a “convincing all-time-high,” the analysts said. According to the data, the new milestone has broken a previous high of BTC accumulation recorded by crabs in July 2022 at the peak of 126,000 BTC, or $2 billion, bought per month.

Bitcoin net position change for addresses holding up to 10 BTC. Source: Glassnode

While crabs and shrimps have been accumulating record amounts of Bitcoin, large Bitcoin investors have been selling. According to Glassnode, Bitcoin whales have released about 6,500 BTC, or $107 million, to exchanges over the past month, which remains a very small portion of their total holdings of 6.3 million BTC, $104 billion.

The behavior of shrimps and crabs seems to be interesting given the latest industry events, with Sam Bankman-Fried’s crypto exchange becoming a subject of a massive industry scandal involving alleged fraud and funds misappropriation.

On the other hand, some big Bitcoin investors have claimed to keep being bullish on Bitcoin despite the ongoing crisis, with the government of El Salvador starting purchasing BTC on a daily basis, starting from Nov.17. Twitter CEO Elon Musk also expressed confidence that Bitcoin “will make it” despite the current industry issues, but there might be a “long crypto winter,” he said.

Related: Exchange outflows hit historic highs as Bitcoin investors self-custody

In the aftermath of the fall of FTX, Bitcoin immediately lost about $6,000 of its value, plummeting from around $21,000 below $16,000 in mid-November. The cryptocurrency has been slightly recovering over the past few weeks, edging up to no higher than $17,000.

At the time of writing, BTC is trading at $16,500, or up around 1.7% over the past 24 hours, according to data from CoinGecko.

First time Bear market? Advice from Bitcoin Bull Michael Saylor

Homeowners don’t check the price of their homes while drunk at a party, so why check the price of Bitcoin in that way, Michael Saylor joked.

First-time bear market? It’s also the first Bitcoin (BTC) bear market for Michael Saylor, one of the world’s biggest Bitcoin bulls. 

Executive chairman of one of the world’s largest pro-Bitcoin companies, Saylor took a moment out of his busy schedule at the Los Angeles Pacific Bitcoin conference to speak with Cointelegraph. Crucially, Saylor told Cointelegraph that when it comes to Bitcoin, “you have to take a long frame time perspective.”

“If you’re buying [Bitcoin] and you’ve got less than a four-year time horizon, you’re just speculating in it. And once you’ve got more than a four-year time horizon, then the obvious thing is you dollar-cost average.”

Dollar-cost averaging is a way of reducing exposure to the volatility of an investment. Saylor continued, “You buy the asset that you want to hold for a decade or longer, which is the long-term store of value.”

At 130,000 BTC, MicroStrategy owns 0.62% of the total supply of Bitcoin, as the total Bitcoin mined is restricted to 21 million. MicroStrategy’s entry price is roughly $30,639 per BTC, meaning the technology group’s total investment is substantially underwater — were they to sell for dollars.

Saylor (right) with Cointelegraph reporter Joe Hall.

However, Saylor is nonplussed about the loss — on paper — of billions of dollars, stating, “Don’t get caught up and looking the price day to day, week to week.”

Michael Saylor on stage at Pacific Bitcoin with Swan CEO Cory Klippsten (right). Source: YouTube

The billionaire compares valuing Bitcoin to valuing a home. He joked that “if you bought a house and then every time you went to a party, you got drunk, and then at 11 pm or midnight, you walked up and said, ‘How much will you pay for my house? I want to sell you my entire house right now.’ Someone might say, ‘Well, I’m not really in the mood to buy a house. I’ll give you like half of what you paid for it,’ and then you’ll go home despondent, saying, ‘I lost all my money.’”

Related: Bitcoin may need $1B more on-chain losses before new BTC price bottom

Avoid that anxiety, he advised, and if you really do need the money in the next 12 months, it’s not investable capital; instead, Saylor explained, “It’s working capital.”

“A logical model is if you live in Argentina, you’re holding pesos for a month or two, you’re holding dollars for a year or two. You’re holding Bitcoin for a decade or two. And when you think about it in those frequencies and time frames, it all starts to make sense.”

Finally, as Saylor and Binance CEO Changpeng Zhao suggested, take custody of your Bitcoin. In light of another crypto exchange vanishing with customers’ funds, taking custody of Bitcoin is the only way of ensuring property that cannot be confiscated.

Alameda on the radar of BitDAO community for alleged dump of BIT tokens

Bybit co-founder Ben Zhou stated that while no wrong-doing is confirmed, the BitDAO community would like to see proof of fund from Alameda.

The recent concerns related to the volatility of FTX Token (FTT) seeped into FTX CEO Sam Bankman-Fried’s other business operation, Alameda Research, as the BitDAO community requested information about Alameda’s BitDao (BIT) holding commitment.

On Nov. 2, 2021, BitDAO swapped 100 million BIT tokens with Alameda in exchange for 3,362,315 FTT tokens with a public commitment to hold each other’s tokens for three years, so until Nov. 2, 2024. Given the rising uncertainties and speculations, the BitDAO community was quick to react to the sudden fall of BIT prices on Nov. 8, 2022, suspecting Alameda of dumping the BIT tokens and breaching the three-year mutual no-sale public commitment.

BIT market price chart (1 day). Source: CoinMarketCap

To narrow down the reasons for BIT’s price drop, the BitDAO community requested an allowance for monitoring and verifying Alameda’s commitment to holding BIT tokens. BitDAO provided proof of honoring its side of the commitment by sharing an address that shows BitDAO Treasury holding all 3,362,315 FTT tokens.

In return, the community gave Alameda a deadline of 24 hours to prove its commitment, requesting that:

“The preferred method is for Alameda to transfer the 100 million $BIT tokens to an on-chain (non-exchange) address for the BitDAO community to verify, and hold until the end of the agreement.”

Ben Zhou, the co-founder of crypto exchange Bybit, summed up the matter by stating that while nothing is confirmed, the BitDAO community wants to confirm proof of funds from Alameda.

Standing up against the accusation, Caroline Ellison, the CEO at Alameda Research, confirmed no wrongdoing from the company’s end and promised to share the proof of funds, telling Zhou that:

“Busy at the moment but that wasn’t us, will get you proof of funds when things calm down.”

BitDAO’s proposal to request for Alameda’s funds proof was accompanied by vague warning:

“If this request is not fulfilled, and if sufficient alternative proof or response is not provided, it will be up to the BitDAO community to decide (vote, or any other emergency action) how to deal with the $FTT in the BitDAO Treasury.”

Alex Svanevik, the CEO of blockchain analytics platform Nansen, investigated the on-chain data to find that Mirana Ventures — Bybit’s venture capital arm — withdrew 100 million BIT from FTX. However, he advised the crypto community not to fall for speculations, as withdrawing funds doesn’t mean Alameda is selling.

Related: Coinbase, Alameda-backed Mara launches African crypto wallet service

From Nov. 6, numerous FTX users faced problems while withdrawing their funds from the exchanges, such as delays and failures.

FTX addressed the concerns raised by investors by highlighting the smooth operation of the matching engine. However, the exchange agreed on delays with Bitcoin (BTC) withdrawals due to limited node throughput.

In addition, users facing delays in stablecoin withdrawals were told that withdrawal speeds would get back to normal after banks resumed operations during the weekdays.

Crypto lender Hodlnaut seeks judicial management to avoid forced liquidation

Singaporean law offers temporary protection against any legal proceedings and claims, which the company believes would provide a breathing space to focus on its recovery plan.

Singapore-based crypto lending platform Hodlnaut is seeking judicial management to manage its ongoing liquidity crisis and avoid the forced liquidation of assets in the current bear market.

The crypto lender informed its users in a Tuesday announcement that they have applied to the Singapore High Court to be placed under judicial management. The firm said:

“We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies such as BTC, ETH and WBTC at these current depressed asset prices. Instead, we believe that undergoing judicial management would provide the best chance of recovery.”

Judicial management is a law in Singapore that allows financially troubled firms to rehabilitate themselves. Under this law, the court appoints an officer called the judicial manager for the troubled firm who takes over the charge from the company’s director for the time being. The appointment of a judicial manager can take up to a few months. Until the court confirms, the company may apply to appoint an interim judicial manager to act on a temporary basis in the same capacity.

Hodlnaut has recommended Tam Chee Chong, director of the financial consultancy firm Kairos Corporate Advisory, as the interim and subsequently judicial manager. The crypto lender said that Chong holds nearly four decades of experience in corporate finance advisory and has taken on the role of a judicial manager in various companies which underwent restructuring. The announcement read:

“With his experience and track record, we believe he will be able to execute our recovery plan and restructure the business effectively.”

The application is yet to be heard by the court and the firm has given Aug. 19 as the next date for further updates on their judicial management application.

If approved the law would also protect Hodlnaut from legal claims and proceedings temporarily which the company believes would provide a “breathing space to focus our efforts on the recovery plan to rehabilitate the company.”

Related: Celsius Network coin report shows a balance gap of $2.85 billion

Hodlnaut became one of the many crypto lenders to fall prey to the crypto contagion initiated by the TerraUSD Classic (USTC) collapse and fueled by the insolvency of multi-billion dollar crypto hedge fund Three Arrows Capital, which had borrowed several million dollars in loans from these crypto lenders. The crypto lender paused all trading activity along with deposits and withdrawals on Aug., 8 citing market conditions and liquidity crisis.

Although Hodlnaut avoided any 3AC exposure, multiple reports and on-chain data suggest the firm held about $150 million in USTC at some point. Hodlnaut didn’t respond to Cointelegraph’s requests for comments at press time.

Blue chip NFT performance fails recovery, but investors HODL even harder

In the last 30 days, over 53% of NFT investors made losses on sale trades. Despite the cold market sentiment, the number of investors that hold their NFT investments continues to rise.

The market performance of blue chip nonfungible tokens (NFTs), often considered a good long-term investment, revisited its all-time low range for the second time since June 2022 — falling down below 10,000 Ether (ETH) in the blue-chip index maintained by NFTGo.

Blue chip NFTs marked their best performance not too long ago, on April 29, amounting to nearly 14,900 ETH. However, June 13 was the worst performing day in blue chip NFT history, when the index fell down to 9,331 ETH — primarily driven by a floor price adjustment in CyberKongz and CyberKongzBabies projects.

Performance indicator of blue chip NFTs. Source: NFTGo

In the last 30 days, over 53% of NFT investors made losses on sale trades. Despite the evidently cold market sentiment, the number of investors that hold their NFT investments continues to rise.

Investor behavior pattern show increase in long-term holders. Source: NFTGo

Nearly 500,000 users joined the growing pool of NFT investors in June and July alone who intend to hold for the long-term, taking the number of holders above 3 million at the time of writing. Out of all the NFT categories, PFP (picture for proof) NFTs boast the biggest market capitalization of $13.95 billion.

Former leaders such as collectibles, games and art NFTs together represent approximately $6.7 billion in market capitalization.

Related: OpenSea introduces new stolen item policy to combat NFT theft

Taking a proactive measure to counter illicit activities via NFT trades, NFT marketplace OpenSea announced plans to design policies around the sale of stolen NFTs on its platform.

OpenSea admitted that buyers unknowingly bought stolen items and were penalized for no fault of their own. As a result, the marketplace adjusted its policy to expand the use of police reports in identifying threats.