New investors are entering the bitcoin market at a faster pace and possibly creating upward pressure on prices, on-chain data shows.
- The number of young investment wallets (those that are one to three months old and rarely send bitcoins) has jumped to 2,25,467 this month, the highest level since February 2018, according to data provided by the blockchain analysts firm Chainalysis.That's double from 1,162,632 six months ago.
- The growth curve was much flatter in the first two months of the year but went near-parabolic following bitcoin's March crash.
- "It looks like new people are entering the market, buying bitcoin and putting it in wallets for long-term investment," Chainalysis' economist Philip Gradwell told CoinDesk.
- Investors took advantage of the 40% price drop to levels below $4,000 observed on March 12 and have continued to pour money into the top cryptocurrency ever since.
- "Overall, the data suggests that buying pressure for bitcoin is increasing, and the supply available to buy is reducing as new purchases likely get locked up for the long term," Gradwell said.
- Bitcoin is trading near $10,900 at press time, representing a 52% gain on a year-to-date basis, but still down 83% from the record high of $20,000.
- The number of young wallets surged from 791,289 to 2,000,000 in the second half of 2017 as bitcoin rallied by $2,000 to $20,000. The investor interest remained strong even as prices fell back sharply to $6,000 in February 2018.