BTC Supply in Profit Nears 90% as Price Rallies on Expected Bitcoin ETF Approval

Just under half of the bitcoin supply was in profit at the start of last year.

AccessTimeIconJan 10, 2024 at 9:22 a.m. UTC
Updated Mar 8, 2024 at 7:38 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Nearly 90% of bitcoin (BTC) supply being held is in profit as prices climbed past $46,000 Tuesday in growing anticipation of approval for a U.S. spot exchange-traded fund (ETF), CryptoQuant data show. That's up from just under 50% at the start of last year.

(CryptoQuant)
(CryptoQuant)

Bitcoin rallied almost 160% in 2023 and has gained 50% in the last six months, largely in anticipation of the U.S. Securities and Exchange Commission approving an ETF. The price surge took many HODLers – slang for long-term investors – into the black.

El Salvador, for instance, recently reported a $13 million profit on its bitcoin investment thanks to the rally.

For full coverage of bitcoin ETFs, click here.

However, CryptoQuant analysts warned in a recent report that high unrealized profits amongst bitcoin holders raise the risks of a sharp price decline. That's even as rising demand for the Grayscale Bitcoin Trust (GBTC), which has applied for approval to convert to an ETF, narrowing discounts between the GBTC share price and its net asset value, and increasing trading volumes indicate strong anticipation for the spot ETF approval.

One scenario CryptoQuant lays out is if bitcoin reaches $48,500, the average unit price of those holding crypto for between 2-3 years, a market correction is likely to occur, with potential support levels at $34k and $30k, the research firm wrote in a post. A correction is often considered to be a decline of between 10% and 20%.

CryptoQuant said that the next resistance point for bitcoin, using network valuation metrics known as the Metcalfe band, is at $55,000.

Edited by Sheldon Reback.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.