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Is it time to buy Bitcoin?
9 out of 10 Bitcoin Holders Make Profits: Is It Time to Buy Bitcoin?
Financial analysts rely on the wealth of data available to make informed business decisions. An options trader can view implied volatility, Greek values and Black-Scholes to make a trading decision.
But for almost every market, some data is inevitably hidden from traders because it is private information. For example, stock traders cannot see the balance of a particular private portfolio at any given time. This can lead to difficult decision-making, as not all data is available to traders.
But this is not the case with blockchain.
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Blockchain technology is completely public, meaning every transaction, wallet address, and wallet history is visible at all times. This provides an unprecedented amount of data to traders. One of the most interesting data points is the percentage of portfolios that generate profits, meaning that the average amount price at which Bitcoin (BTC) entered into their portfolio is lower than the current price.
THE percentage of beneficiary addresses is then plotted on a graph, starting with the launch of Bitcoin until today. The chart shows some interesting patterns. During Bitcoin’s early years, the percentage of profitable wallets fluctuated wildly, from 99% in June 2011 to less than 15% in November 2011. The percentage never dropped below 28% after the lows of November 2011.
Since then, this percentage has generally increased. This is largely due to the fact that Bitcoin has seen huge price increases over the past decade. If you have purchased Bitcoin in the last decade, it is almost certain that you will make a profit. However, some wallets do not generate any profit. These wallets likely purchased Bitcoin as it hit new all-time highs (ATH) in early March. As of this writing, almost 90% of portfolios are generating profits.
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This raises the question of whether Bitcoin can continue to rise. Simple logic would dictate that if 9 out of 10 people make a profit, they are more likely to sell, which would cause the price of BTC to fall. Although BTC has seen a slight pullback over the past month, many are still not selling. This could mean that many wallet addresses are bullish on Bitcoin, not just in the short term, but perhaps for years to come.
The two main reasons for this position are the Bitcoin cycle hypothesis and the potential for widespread adoption. THE Bitcoin Cycle This is a trend that has existed for about four years since Bitcoin began, in which the price hits relatively low levels, climbs before halving, hits new highs, and then falls to new relative lows . If this cycle continues into 2024 and 2025, Bitcoin could continue to rise, potentially above $100,000. With spot exchange-traded funds (ETFs) and increasing institutional investment, there is an argument that the BTC price is just getting started.
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The percentage of wallet profits does not give a clear picture of the future of Bitcoin. It simply provides traders with more information to help them make informed decisions. Ultimately, the interpretation of the data is at the discretion of each trader.
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This item 9 out of 10 Bitcoin Holders Make Profits: Is It Time to Buy Bitcoin? originally appeared on Benzinga.com
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