Slow Return of On-Chain Bitcoin Whales Despite Surging Prices, New Data Shows

Slow Return of On-Chain Bitcoin Whales Despite Surging Prices, New Data Shows

Crypto News – Despite Bitcoin surpassing its previous all-time high, on-chain Bitcoin whales are displaying a sluggish resurgence. Following the recent rally to $72,000, the number of new daily Bitcoin “millionaire” wallets has seen an increase to approximately 1,500. However, this uptick pales in comparison to the surge witnessed during the last bull run.

According to a report released on March 11 by Kaiko Research, the number of new daily million-dollar Bitcoin wallets had plummeted to less than 500 in January but is now edging closer to the 2,000 mark. Kaiko highlighted that during the previous bull run, when Bitcoin reached its previous peak of $69,000 on November 10, 2021, over four thousand wallets were minted as millionaires daily, with an additional two thousand wallets achieving the $10 million milestone each day.

The report noted, ‘Despite the recent price surge, on-chain bitcoin whales are seeing a slow return.’ Remarkably, the current influx of new daily Bitcoin millionaires mirrors figures from July 2022, a period marked by Bitcoin’s dip below $20,000.

Kaiko attributed this sluggish return of new daily Bitcoin millionaire wallets to the cautious deployment of new capital and the possibility of large whales taking profits as Bitcoin soared to new highs. It suggested that, unlike the massive capital influx observed in 2021, whales may be adopting a more guarded stance, awaiting confirmation of sustained gains before committing to investments. Additionally, Kaiko speculated that more whales might be opting to store their holdings with custodians rather than in personal wallets.

The recent launch of spot Bitcoin exchange-traded funds (ETFs) likely played a role in this dynamic. Nine new United States-based spot Bitcoin ETFs have collectively accumulated more than $28 billion worth of Bitcoin since their introduction in January, as per data from BitMEX Research on March 8. Notable custodians of these spot Bitcoin ETFs include Coinbase and BitGo. Investors in spot Bitcoin ETFs hold shares in the ETFs rather than Bitcoin directly, meaning their indirect Bitcoin holdings are not reflected in the data on whale wallets.

In 2023, there was a remarkable resurgence for Bitcoin “hodlers,” with the price surging approximately 160% to $42,200. Since then, Bitcoin has experienced a further 71% spike, reaching a price of $72,200 at the time of publication.

Overall, despite Bitcoin’s meteoric rise, the cautious behavior of on-chain whales suggests a more tempered approach to the current market dynamics.