Bitcoin (BTC) accumulation by investors has surged recently. Data from market analysis firm Glassnode reveals that most wallets, from small "shrimp" holding less than 1 BTC to "whales" with over 10,000 units, are registering a cumulative accumulation trend score of 1.
This score reflects the relative strength of net accumulation over the past 15 days. A score of 1 indicates active BTC accumulation, while 0 suggests a prevailing trend of selling and distribution.
This consensus buying behavior across most investor groups is unusual. The two most recent instances were in May of this year and 11/2024. Notably, wallets holding less than 100 BTC are driving this trend. This investor group is purchasing bitcoin at an average rate of 19,300 units per month, according to Glassnode.
This demand surpasses the monthly new supply of 13,400 BTC. Consequently, small and medium investors alone are absorbing over 100% of the new supply, creating a supply shortage.
This accumulation trend coincides with bitcoin reaching new price levels. Since the beginning of the year, BTC has climbed nearly 30%, reaching approximately 27,800 USD. Over the past seven months, it has hit three record price milestones, each consisting of multiple consecutive peaks. The highest recorded price was over 123,091 USD on 14/7.
Many analysts predict that bitcoin's price will continue to benefit from the increasing investments from large institutions and financial entities. Last week, BlackRock's spot bitcoin ETF, IBIT, became the fastest ETF to reach 80 billion USD in assets under management (AUM), surpassing other traditional exchange-traded funds.
Growing legal support in major markets, especially the US, is another significant driver. The US House of Representatives recently passed a bill creating a legal framework for stablecoins pegged to the US dollar, a landmark moment for the industry. The House also passed two other bills: one establishing a legal framework for cryptocurrencies and another prohibiting the US from issuing a central bank digital currency.
The tightening supply is another major factor driving accumulation. Since the fourth bitcoin halving in 4/2024, miner activity has decreased as mining rewards were halved.
Furthermore, long-term holders are reluctant to sell, confident in bitcoin's future value and scarcity. Daily, miners introduce new bitcoin into circulation. However, long-term investors are holding onto more bitcoin than miners are releasing. As more bitcoin is locked in cold wallets (private, offline storage devices), the available supply for trading continues to shrink. This exacerbates the supply shortage, causing significant price fluctuations whenever demand increases.
Tieu Gu (CoinDesk)
