Key Points
- Bitcoin’s cumulative trading volume from January to August 2024 hit $2.874 trillion, a 20% increase from the same period in 2021.
- Large Bitcoin investors have increased their holdings, indicating confidence in Bitcoin’s long-term value.
Between January and August 2024, Bitcoin trading reached unprecedented levels, with a cumulative volume of $2.874 trillion.
This figure is nearly 20% higher than the $2.424 trillion recorded during the same period in 2021, marking the highest volume since 2012.
Market Activity and Volatility
A recent weekly report by Kaiko, a data analytics firm, suggests that the surge in trading volume is due to increased market activity and investor participation. Notably, Bitcoin’s 10-day realized volatility spiked to an annualized 100% in April.
This volatility was triggered by strong inflows into US-listed spot exchange-traded funds (ETFs) and expectations of Federal Reserve rate cuts, which pushed Bitcoin prices above $70,000.
In August, concerns about the US economy and the unwinding of the yen carry trade led to further volatility, affecting various risk assets, including cryptocurrencies. Regardless, Bitcoin’s market activity remained strong.
Large Investors Bolster Holdings
Data from IntoTheBlock shows that large Bitcoin investors have been actively increasing their holdings. Investors holding between 100 and 1,000 BTC have accumulated over $10 billion in Bitcoin over the past six months.
These large holders now control 20.3% of the total Bitcoin supply, up from 3.82 million BTC to 4.01 million BTC, a 5% increase. This accumulation indicates confidence in Bitcoin’s long-term value, even as short-term holders may face selling pressure if market conditions worsen.
According to the latest data, 78% of all Bitcoin addresses are currently profitable. However, this profitability varies greatly among different buyer cohorts. Specifically, addresses that purchased Bitcoin between $47,000 and $64,000 are facing potential selling pressure, with only 27.6% of these addresses still in profit.
Spot Bitcoin ETFs Indicate Institutional Interest
Spot Bitcoin ETFs have also seen significant activity. After experiencing eight days of negative flows, US spot Bitcoin ETFs reported $28.72 million in net inflows on Monday. Fidelity’s FBTC led the inflows with $28.6 million, while Bitwise’s BITB followed with $21.99 million.
However, outflows were noted from Grayscale’s GBTC and BlackRock’s IBIT, with IBIT recording $9.06 million in net outflows. Despite these fluctuations, Bitcoin ETFs have accumulated $16.92 billion in net inflows since their inception in January.
As Bitcoin continues to experience high trading volumes and significant institutional interest, market participants are keeping an eye on broader economic and political developments, including upcoming events like the US presidential election debate, which could further influence cryptocurrency markets.
