90% Profit Holders as BTC Surges Past $46,000

In a market frenzy fueled by mounting hopes for a U.S. spot exchange-traded fund (ETF) approval, Bitcoin (BTC) soared past the $46,000 mark, marking a significant milestone in the cryptocurrency’s tumultuous journey. According to data from CryptoQuant, an overwhelming 90% of the BTC supply is now held in profit, a staggering surge from just under 50% recorded at the commencement of the previous year.

The meteoric rise of Bitcoin, which experienced a remarkable 160% rally in 2023 and has further surged by 50% within the last six months, has predominantly been driven by mounting expectations surrounding the awaited decision from the U.S. Securities and Exchange Commission (SEC) regarding the ETF.

Source: CryptoQuant

The price spike has propelled many long-term investors, affectionately termed ‘HODLers’ within the crypto community, into profitable territory. Even countries like El Salvador have reaped substantial benefits, reporting a lucrative $13 million profit on their bitcoin investment due to this unprecedented rally.

Despite the jubilant atmosphere surrounding Bitcoin’s financial windfall, analysts at CryptoQuant have sounded a note of caution in a recent report. The surge in unrealized profits amongst BTC holders, while indicative of the current bullish sentiment, concurrently raises the specter of a potentially sharp and significant price decline.

The enthusiasm for the anticipated spot ETF approval has manifested in various market indicators. Notably, the Grayscale Bitcoin Trust (GBTC), which is actively pursuing conversion into an ETF, has witnessed escalating demand. This surge has narrowed the gaps between the GBTC share price and its net asset value while simultaneously witnessing a surge in trading volumes. These trends paint a vivid picture of the market’s fervent anticipation for the imminent approval of the spot ETF.

Nevertheless, the warning bells sounded by analysts underscore the inherent volatility and risks looming over the cryptocurrency landscape. The euphoria surrounding the ETF approval, while driving substantial gains and profits for investors, might also set the stage for a substantial market correction if sentiments pivot.

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