Bitcoin Investment Trends: A Shift in Speculator Strategies

In the dynamic world of cryptocurrency, fresh insights indicate that bitcoin investors are transitioning from being long-term holders to short-term speculators. Such a shift suggests that the cryptocurrency market is on the rebound after enduring a prolonged bear market.

Bitcoin Investors Transition: An Analysis by Glassnode

The recent analysis conducted by the onchain analytics firm, Glassnode, provides a comprehensive understanding of the fluctuating dynamics in the bitcoin (BTC) investors' landscape. The report studies the transitions of bitcoin ownership, tracing the flow from long-term holders to short-term speculators and vice versa.

Long-term holders, often referred to as 'HODLers' typically accumulated bitcoin during the bear market phase. Meanwhile, short-term speculators aim to capitalize on the price fluctuations, thereby indicating a potential shift in the market cycle.

A New Perspective: 'Realized Capital' and 'Age Bands'

To delve into the intricacies of bitcoin ownership transitions, Glassnode utilizes a unique metric known as 'realized capital.' This metric measures the cumulative amount historically paid to acquire all existing bitcoins, providing insights into when the coins last moved between investors.

Furthermore, Glassnode categorizes the bitcoin supply into 'age bands', providing a snapshot of dormant coins held for different time durations. The report explains that during market uptrends, older coins are typically transferred from long-term holders to novice investors. In contrast, during market downtrends, short-term speculators lose interest, resulting in a gradual transfer of coins to longer-term holders.

A Look into the Current Market Cycle

The report signifies that coins held for 1-2 years are considered a crucial long-term holder cohort. The holdings of this group peak during bear market bottoms, indicating a rise in conviction buyers. On the other hand, bitcoins held for less than a month are representative of short-term speculators, whose share in the bitcoin supply spikes during bull markets, signifying an inflow of new money.

The distinctive models used by Glassnode allow a comparative analysis of the holdings of each group, providing valuable insights into the current market cycle. The prevalent structure seems to mirror the recovery phase following a significant bear market bottom, akin to the patterns seen in 2016 and 2019. Although Bitcoin's price has seen a rebound from the lows, long-term holders still retain control over 80% of the supply.

Profitability of Short and Long-term Holders

Beyond coin age tracking, Glassnode also models the profitability of short and long-term holders based on their average cost basis. This analysis helps measure the financial incentive to sell versus hold at varying price levels. The current models suggest the market might have entered an early bullish phase. Here, long-term holders are making profits, while short-term traders are nearing the break-even mark.

The report concludes by stating, "The bitcoin supply remains strongly dominated by the HODLer cohort, with a super-majority of coins now being older than 6-months."

These fresh perspectives on the shifting strategies of bitcoin investors provide a fascinating look into the ever-changing landscape of cryptocurrency. Whether you're a long-term holder or a short-term speculator, the insights provided by Glassnode's report offer a comprehensive understanding of the current state of the market.

Frequently Asked Questions

What Is a Precious Metal IRA?

You can diversify your retirement savings by investing in precious metal IRAs. This allows you to invest in gold, silver and platinum as well as iridium, osmium and other rare metals. These are “precious metals” because they are hard to find, and therefore very valuable. They make excellent investments for your money and help you protect your future from inflation and economic instability.

Precious metals are sometimes called “bullion.” Bullion refers only to the actual metal.

Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.

A precious metal IRA allows you to invest directly in bullion, rather than buying stock shares. You'll get dividends each year.

Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. Instead, you only pay a small percentage on your gains. Additionally, you have access to your funds at no cost whenever you need them.

What is a gold IRA account?

Individuals who want to invest with precious metals may use the Gold Ira accounts, which are tax-free.

You can purchase physical gold bullion coins anytime. You don’t have to wait to begin investing in gold.

You can keep gold in an IRA forever. You won't have to pay taxes on your gold investments when you die.

Your heirs inherit your gold without paying capital gains taxes. And because your gold remains outside of the estate, you aren't required to include it in your final estate report.

You'll first have to set up an individual retirement account (IRA) to open a gold IRA. Once you've completed this step, an IRA administrator will be appointed to your account. This company acts as a middleman between you and the IRS.

Your gold IRA custodian can handle all paperwork and submit necessary forms to IRS. This includes filing annual reports.

After you have created your gold IRA, the only thing you need to do is purchase gold bullion. The minimum deposit required for gold bullion coins purchase is $1,000 You'll get a higher rate of interest if you deposit more.

When you withdraw your gold from your IRA, you'll pay taxes on it. You will be liable for income taxes and penalties if you take the entire amount.

If you only take out a very small percentage of your income, you may not need to pay tax. There are exceptions. However, there are exceptions. If you take 30% or more of your total IRA asset, you'll owe federal Income Taxes plus a 20% penalty.

You shouldn't take out more then 50% of your total IRA assets annually. You could end up with severe financial consequences.

How is gold taxed in Roth IRA?

An investment account's tax is calculated based on the current value of the account, and not on what you paid originally. If you invest $1,000 into a mutual fund, stock, or other investment account, then any gains are subjected tax.

But if you put the money into a traditional IRA or 401(k), there's no tax when you withdraw the money. Dividends and capital gains are exempt from tax. Capital gains only apply to investments more than one years old.

Each state has its own rules regarding these accounts. Maryland's rules require that withdrawals be taken within 60 days after you turn 59 1/2. Massachusetts allows you up to April 1st. New York offers a waiting period of up to 70 1/2 years. To avoid penalties, plan ahead so you can take distributions at the right time.

How can you withdraw from an IRA of Precious Metals?

First, you must decide if you wish to withdraw money from your IRA account. You should also ensure that you have enough money to cover any fees and penalties associated with withdrawing funds.

A taxable brokerage account is a better option than an IRA if you are prepared to pay a penalty for early withdrawals. If you choose this option, you'll also need to consider taxes owed on the amount withdrawn.

Next, calculate how much money your IRA will allow you to withdraw. This calculation is dependent on several factors like your age when you take the money out, how long you have had the account, and whether or not your plan to continue contributing.

Once you know how much of your total savings to convert to cash, it's time to choose the type of IRA that you want. Traditional IRAs allow you to withdraw funds tax-free when you turn 59 1/2 while Roth IRAs charge income taxes upfront but let you access those earnings later without paying additional taxes.

Once the calculations have been completed, it's time to open a brokerage accounts. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. You can save money by opening an account with a debit card instead of a credit card to avoid paying unnecessary fees.

You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. Some storage facilities will take bullion bars while others require you only to purchase individual coins. Before choosing one, consider the pros and disadvantages of each.

Bullion bars are easier to store than individual coins. You will need to count each coin individually. However, you can easily track the value of individual coins by storing them in separate containers.

Some people prefer to keep coins safe in a vault. Some people prefer to store their coins safely in a vault. You can still enjoy the benefits of bullion for many years, regardless of which method you choose.


  • If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (
  • You can only purchase gold bars at least 99.5% purity. (
  • If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (
  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (
  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (

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The History of Gold as an Asset

From the ancient days to the early 20th Century, gold was a common currency. It was universally accepted and loved for its beauty, durability, purity and divisibility. Due to its value, it was also internationally traded. However, since there were no international standards for measuring gold at this point, different weights and measures existed worldwide. For example, one pound sterling in England equals 24 carats; one livre tournois equals 25 carats; one mark equals 28 carats; and so on.

The United States began issuing American coin made up 90% copper, 10% zinc and 0.942 fine-gold in the 1860s. This caused a drop in foreign currency demand which resulted in an increase of their prices. This was when the United States started minting large quantities of gold coins. The result? Gold prices began to fall. The U.S. government needed to find a solution to their debt because there was too much money in circulation. To do this, they decided that some of their excess gold would be sold back to Europe.

Many European countries didn't trust the U.S. dollars and started to accept gold for payment. Many European countries started to accept paper money as a substitute for gold after World War I. The value of gold has significantly increased since then. Although the price of gold fluctuates today, it remains one of your most safe investments.

By: Jamie Redman
Title: Bitcoin Investment Trends: A Shift in Speculator Strategies
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Published Date: Tue, 17 Oct 2023 19:30:26 +0000

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