Bitcoin as an Example
Diving Deeper into Bitcoin
Last updated
Diving Deeper into Bitcoin
Last updated
Above is a graphical representation of Bitcoin HODL Waves, illustrating the percentage of Bitcoin held by investors over various durations. The data reveals distinct trends based on the length of time Bitcoin is held.
Short-duration holding periods, representing newer investors or active traders, exhibit high volatility and tend to move in tandem with market fluctuations. These holders are more susceptible to short-term market dynamics and are likely to buy and sell based on recent price movements.
In contrast, longer-duration holding periods, particularly those extending beyond 2-3 years, show remarkable stability. Investors who have held Bitcoin for several years are generally less influenced by short-term market volatility and more committed to long-term value appreciation.
Notably, the chart indicates that over 50% of Bitcoin has remained unmoved for at least the past year. This significant percentage of long-term holders underscores the confidence in Bitcoin's enduring value and presents a substantial opportunity for Bitcoin staking. By leveraging the stable base of long-term holders, Bitcoin staking can offer attractive returns and reinforce the ecosystem's stability.
At present, Bitcoin's market capitalisation is approximately $1.3 trillion. Impressively, more than $650 billion worth of Bitcoin has remained unmoved in the past year, and approximately $195 billion has not been moved in the last ten years. This immobile portion of Bitcoin opens up a substantial staking market, potentially as large as $650 billion at the current market cap. This could enhance the utility and yield potential for long-term holders, further solidifying Bitcoin’s position as a robust store of value and an attractive investment vehicle.
The projected 10x growth in Bitcoin's market cap over the next five years could lead to a corresponding increase in yield-generating opportunities for investors.
The current market capitalisation of Bitcoin stands at approximately $1.3 trillion. Based on past performance, where Bitcoin experienced a 20-fold increase over the last five years, and the anticipated mainstream adoption, our thesis projects a tenfold growth in market capitalisation over the next five years.
As studied above, more than 50% of Bitcoin has remained unmoved in the past year. This indicates that over 50% of Bitcoin could potentially be staked to earn attractive yields. However, due to the absence of a staking mechanism, the majority of Bitcoin is currently not staked, and only a small portion is lent out to earn borrowing interest rates.
With the introduction of multipli, this landscape is poised for positive change. As Bitcoin's market capitalisation is projected to grow to $13 trillion, the potential market cap for staked Bitcoin could reach $6.5 trillion.
