Amount of hodled or lost Bitcoin has come to a new major high, 10% of the circulating supply is now at a loss

By Selena On Sep 9, 2021

Bitcoin price latest 15% drop, with a bottom at $43,000, has increased unrealized losses among holders. Their markup is based on the average cost of on-chain coins. Elsewhere, according to Glassnode, the amount of lost or hodled BTC has hit a seven-month peak of 7,167,889.595 BTC, exceeding 33.96% of the total Bitcoin supply of 21 million coins. Almost three weeks ago, on Aug. 21, this metric hit a five-month high.

Source: Glassnode

Number of lost Bitcoin exceeds 33.96% of total supply at 7-month high

Firstly, we talk about the Percent Supply in Profit indicator, which allows traders to use the portion of the existing coins on the market that are in profit. The price is determined by the last time they moved. Metrics like Percent Supply in Profit help determine the current sentiment on the market by showing the profits and losses of currency holders.

Source: Glassnode

For now, more than 10% of Bitcoin is held by traders, and investors have entered the unrealized loss zone, which means that if holders had liked to sell their coins at this exact moment, they would face losses since their average entry was between $52,000 and $45,800.

At the previous market correction in July, when price plummeted to $29,000, more than 20% of the total supply suffered a significant loss. Supply remains profitable mainly, with around 90% of holders profiting from current market conditions. The Bitcoin market will become unprofitable if its price falls below $10,000.

The largest active entry volume on the market appeared in 2021 with large institutional players being introduced to the market. In January 2021, almost $20 billion worth of BTC was purchased for numerous weeks in a row.

BTC/USD 4-hour chart | Source: TradingView

At press time, BTC is trading at $47,032 after recovering nearly 10% in the one-day timeframe. The latest correction is attributed to a series of liquidations in the market. At the same time, most on-chain indicators, such as exchange flows and realized/unrealized profits, remain bullish and do not indicate any global trend reversal in the crypto market.

Elsewhere, however, some of these hodled or lost coins may be stored in cold wallets by long-term holders and crypto enthusiasts who bought/mined in its early days. This also includes wallets on old computers that have been lost and wallets with access not available to owners since they lost their private keys and cannot restore them.

Price may collapse, Swedish Central Bank warns

Recently, at a financial event in Stockholm, Stefan Ingves, the governor of the Swedish Central Bank, spoke out compared cryptocurrency trading to stamp collecting and selling. According to him, BTC is unlikely to function and develop further without the support of financial regulators or the government.

At the same time, Ingves has not denied that it is possible to make a small fortune by trading Bitcoin or any other cryptocurrencies—but it is also possible by trading stamps.

Although the largest financial regulators in the world feel threatened by the rapid growth of the digital asset industry, some countries like El Salvador are eager to implement crypto payments by making Bitcoin a legal tender.

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