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Retailers hoarding BTC

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Onchain data recently shed light on the fact that retailers ie. Investors buying 1 BTC or less have been hoarding BTC at the fastest rate ever.

Why are retailers ramping up on BTC

If we refer to prior historical data, analysts noted that in early 2018 when BTC was trading at a price range of $20,000, retail investors jumped on the bandwagon and indulged in impulse buying. This resulted in BTC tanking to as low as $3200 at the end of 2018 which was a bear market. This behavior wherein retailers indulge in impulse buying at a cyclic high only to be followed up by a cyclic low has been seen historically.

In the current market scenario, it has come to notice that the current prices aren’t cyclic high instead they are the cyclic bottom. The prices of Bitcoin are trading nearly 70% lower than the price high achieved by Bitcoin in the past year. Bitcoin made a refreshing recovery breaching the $24,000 mark. This coincided with retail investors pitching in and impulse buying Bitcoin.

Will retailers HODL Bitcoin or sell it after an increase in US Fed rates?

Although analysts are hoping that impulse retail buying may result in Bitcoin moving past the $30,000 price barrier however they believe that retail investors may abandon ship once the Fed hikes the rates. This could also result in accelerating an upcoming Bitcoin price slump.

Another fact that analysts noted is that these Bitcoin transactions weren’t from any normal wallets, instead they were instituted by wallets that are used to shadow transactions so that the users can indulge in money laundering or various illegal activities.

Disclaimer: The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Please do your own research.


Author - Govind R.