Despite the severe bear market of 2022 and the bleak global economic forecast for 2023, the volume of Bitcoin wallet accounts having a non-zero balance gets better.
According to statistics released by crypto analytics company Glassnode, the number of Bitcoin addresses with a non-zero balance surpassed 43.8 million for the first time on January 8th. This brought the number of addresses over the previous record high of 43.76 million printed in mid-November 2022.
In November, the collapse of one of the world’s major cryptocurrency exchanges, FTX, which resulted in consumers losing access to billions of dollars, prompted a move towards crypto self-custody. Investors hurried to remove their Bitcoin from exchanges, causing an increase in address numbers.
However, when Bitcoin’s price plummeted to new 2022 lows in response to fears of contagion from FTX’s collapse, many wallets liquidated their entire Bitcoin holdings, causing an equally rapid decline in non-zero address counts.
According to statistics collected by Glassnode on Bitcoin wallet address cohorts, the most recent increase in non-zero address numbers has been driven by an increase in wallets holding a modest quantity of BTC.
Initially, the number of Crab, Fish, and Shark wallets increased in response to the Bitcoin price decline after the FTX crash, as bigger investors took advantage of the chance to purchase the dip.
Thus, it can be deduced that the recent increase in non-zero wallet address numbers is accompanied by a shift in Bitcoin ownership away from bigger investors and towards new, smaller investors. Larger investors are considerably more likely to be HODLers, or individuals who purchase BTC and hold it for an extended length of time, due to their confidence in the cryptocurrency’s future.
The Realized HODL Ratio (RHODL) of Glassnode, a ratio of the two Bitcoin age bands, seems to be bottoming. The RHODL is a measure of the disparity in Bitcoin wealth distribution between experienced and younger investors, calculated by comparing the number of coins that haven’t changed hands for 1-2 years to the number of coins acquired within the past week.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.