3 million bitcoins unmoved for 5 years, Analysts worry: Low liquidity affects prices

The latest data released by Coin Metrics shows that the amount of long-term unmoved bitcoins has reached a historical high. Does this mean that Bitcoin is a better store of value or still has the potential as a medium of exchange?

The research institution CoinMetrics released a report on July 23, indicating that as of July 19, the percentage of unmoved bitcoins in the past five years reached 21.6%, approximately 3,847,859 bitcoins.

Here, "unmoved" refers to bitcoins that have not been transferred out of the wallet and have not been involved in any transactions.

Cryptocurrency analyst Matt Odell believes that this trend indicates that Bitcoin is gradually becoming a valuable store of value rather than a medium of exchange. The index shown in the chart below includes bitcoins that have not moved for 180 days to over two years.

"The amount of Bitcoin (BTC) supply that has been untouched (i.e. not transferred) for at least five years recently reached an all-time high. This potentially signals that BTC is increasingly becoming a store of value, as opposed to a medium of exchange."https://t.co/GGrqOZHmnT pic.twitter.com/TwJG18lFp7

— ODELL (@ODELL) July 23, 2019

Other cryptocurrency analysts such as Willy Woo raised concerns, expressing worries that a lack of Bitcoin liquidity could lead to reduced price volatility, turning Bitcoin's trend into something similar to commodities like gold. He stated on Twitter:

Why does the trend of gold look like a shitcoin? And it runs over 100 years, not 100 weeks.

Why does the Gold trade like a shitcoin but over 100 years instead of 100 weeks? pic.twitter.com/z9HymGYQPd

— Willy Woo (@woonomic) July 23, 2019

Woo further expressed his concerns:

If the majority of Bitcoin is held by a few wealthy individuals, then these people will become the "new bankers."

The report pointed out that due to the limited Bitcoin supply and large institutional investors steadily accumulating cryptocurrencies throughout 2018, Woo's concerns hold a certain credibility.

Related Reading

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• Will Bitcoin's reduced production lead to price increases? Research confirms: No direct impact

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