Their recent on-chain analysis reveals an insight that could turn the crypto world on its head – Long-Term Holders (LTHs) consistently outpace Short-Term Holders (STHs) in the Bitcoin profit race.
Understanding Short-Term Holders vs. Long-Term Holders
In the dynamic realm of blockchain, an STH is described as any entity that has held its bitcoins in the same wallet for 155 days or less while an LTH is the exact opposite. Let’s dive into the numbers, shall we?
Glassnode’s analysis indicates that only 300k BTC out of the 2.56 million BTC held by STHs remains in profit. In a stark comparison, LTHs—known in the crypto community as ‘hodlers’ or ‘diamond hands’—who resist the influence of short-term price fluctuations and are likely early adopters, are outperforming by a significant margin, with an average profit of 28% across their holdings.
Are you surprised to hear that despite bitcoin’s mere 4% depreciation over the past 155 days, a small percentage of short-term holders are currently in profit? You’re not alone.
Riding Out Periods of Volatility
Bitcoin, known for its roller-coaster-like volatility, has gone through two substantial periods of volatility despite moving in a generally sideways channel for the last five months. Yet, our courageous LTHs, guided by their stoic belief in Bitcoin in the long-run, could comfortably ignore these price fluctuations. In stark contrast, most STHs, driven by sentiment and often susceptible to leverage, were likely swayed by these short-term price changes.
Knowing When to Hold On
Here comes the crucial lesson: Short-term trading can cost you dearly in the world of Bitcoin. In fact, it’s much more likely to drive up your average cost basis, curbing your overall profit.
So, the best advice we can give? Switch to the strategy that has been proven to win – HODL!
As for the market’s future outlook, it’s as unpredictable as ever. Pessimists are pointing to last month’s price crash, seen as a potential trend reversal signal. In contrast, optimists are noting the heavily oversold territory combined with a recent higher-low, signaling a likely return to the 2023 uptrend.
While the truth remains to be revealed in the near future, one thing remains clear — your best bet to maximize your bitcoin profits is simply to hold onto them. Let’s remember that the world of cryptocurrency is not a sprint, it’s a marathon, and those with the patience to weather the storm find themselves out ahead.
So, to all the blockchain enthusiasts out there, here’s our parting message: Hold tight, stay strong, and let the crypto marathon continue!