Adoption is rising: The Amount of Bitcoin in Active Wallets Is Near Record Highs

[TheWeb]

An increasing amount of bitcoin is being held by active individual users, rather than companies and long-term investors, according to new data from Chainalysis.

Announced Monday, the analytics firm found 4.8 million bitcoin, or roughly 32 percent of the protocol's cryptocurrency supply (minus lost coins), was held in personal wallets with some level of transactional activity as of August 31. That's up substantially from the end of 2017 – around the time the market peaked – when just 3.8 million bitcoin, or 26 percent, was in the hands of individuals.

The August numbers were the second-highest for individual accounts on record, and off only slightly from July's high of 4.95 million bitcoin, or 33 percent of all coins in circulation.

"There are more people who are holding crypto personally," Chainalysis economist Philip Gradwell told CoinDesk.

As a result, Gradwell said, "there's a much larger supply that's liquid. A lot of the people who bought [this year] are buying smaller amounts," adding:

"They are ready – if things were to change, [if] the opportunity to spend it were to arise – to actually spend it. We've kind of overcome the first hurdle of adoption, getting bitcoin into people's hands."

Speaking to that potential, Gradwell said technical solutions aimed at improving bitcoin – like the much-lauded Lightning Network, which could enable faster payment processing options for merchants and service providers – could tip the scales for users deciding whether to transact with bitcoin or cash out during the next bull market.

To be sure, bitcoin is still predominantly held as an inactive investment, whether custodied by an institution or individual, with 6.3 billion held in accounts that had no activity in over a year, according to Chainalysis data.


Read More: https://www.coindesk.com/hodl-no-more-the-amount-of-bitcoin-in-active-wallets-is-near-to-a-record-high/

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[figmentofmyass]

An increasing amount of bitcoin is being held by active individual users, rather than companies and long-term investors, according to new data from Chainalysis.

Announced Monday, the analytics firm found 4.8 million bitcoin, or roughly 32 percent of the protocol's cryptocurrency supply (minus lost coins), was held in personal wallets with some level of transactional activity as of August 31. That's up substantially from the end of 2017 – around the time the market peaked – when just 3.8 million bitcoin, or 26 percent, was in the hands of individuals.

The August numbers were the second-highest for individual accounts on record, and off only slightly from July's high of 4.95 million bitcoin, or 33 percent of all coins in circulation.

"There are more people who are holding crypto personally," Chainalysis economist Philip Gradwell told CoinDesk.

As a result, Gradwell said, "there's a much larger supply that's liquid. A lot of the people who bought [this year] are buying smaller amounts"

it's nice to see numbers that contrast the narrative that the bitcoin supply is completely concentrated. i'm glad to see BTC is getting well distributed and that individual activity has actually grown since the top in december.

however, it's a little disturbing to think about how they determine what constitutes an "active individual user". that requires wallet analysis. chainalysis probably knows a lot more about our activity than we think.....

[pooya87]

unfortunately this is pure guesswork and it may even be considered wrong. for starters as someone looking at the whole system for analysis purposes you have to know there is no such thing as "wallets"! all there is that YOU can see are transactions on the blockchain (addresses). you can do some blockchain analysis and come up with some sort of connection between addresses and form wallets in your head but that will always be inaccurate. so statements like "X% of supply is in hands of individuals" is by nature wrong.

as for adoption, usage, rises,... of course it is all rising. it is not something that started in 2017, this has been going on from day 1. there are more users coming in, they buy more and more, and the usage of bitcoin grows and with it bitcoin will be more distributed. but it is not something that we can measure accurately.

[jseverson]

To be sure, bitcoin is still predominantly held as an inactive investment, whether custodied by an institution or individual, with 6.3 billion held in accounts that had no activity in over a year, according to Chainalysis data.

Wait, 6.3 billion what? US Dollars? Weren't people always taught to include units as a kid lol.

There's one thing that aligns with my observations though:

Whether bitcoin users are transacting with personal wallets or exchange accounts, Chainalysis economist Kimberly Grauer said the monetary aggregates for these categories have stabilized, suggesting news articles don't spur as much dramatic trading activity as they did last year.

Either way, we obviously can't trust the actual numbers' precision, but I feel like if there's anyone who's qualified to come up with numbers like this, Chainanalysis is. I'm quite inclined to believe them.

[BlockchainGod]

I think it says we'll see the green light soon. The price is very low now and people accumulate coins, it is a stage of accumulation in the financial markets which always before growth.

[timotron]

Interesting info. Definitely a good sign.

I would love to know why are so many wallets active - What is the use of this transactions?

Apart from Trading, I don't have a global idea about this.

[PsylockReborn]

There's always a rainbow after the rain. So just hold on tight and soon bitcoin's performance in the market will make us all happy. Everyday there are lots of newcomers into crypto space so we should expect that sooner or later bitcoin's value will recover and hope it will reach its ATH again within this year. Goodluck to all of us and have a great day ahead of you guys!

[avikz]

The analysis essentially shows that small investors and individuals are holding up bitcoin in smaller fractions. That means common people like us, is entering the market slowly! While the numbers are encouraging we still are stuck in one single point, "Bitcoin as an investment". That is the major holdback for us because we don't have any option to use it as a currency.

I belong from a third world country and when I purchased my own flat, I literally asked my housing agent whether he would take his commission in bitcoin or not! It seems like he heard about bitcoin but as an illegal currency, so he was not ready to take bitcoin. Such kind of misinformation and the unclear legal status is actually killing the market from inside.

Having new entrants in the market is good, but if it is for long term investment, we would be able to achieve the goal of bitcoin to become a currency system, rather it will remain as an investment, which would not serve the purpose!

We will really see the effect of adoption when we will be able to buy our daily required products using bitcoin in merchant stores! That will be the major driving force for sustainable future growth. 

[ResuLT]

This indicates that people now wanted to sell off their bitcoins and transfer it into a big exchange like Binance and just sell it away without noticing the dump risk

[talkbitcoin]

There's always a rainbow after the rain. So just hold on tight and soon bitcoin's performance in the market will make us all happy. Everyday there are lots of newcomers into crypto space so we should expect that sooner or later bitcoin's value will recover and hope it will reach its ATH again within this year. Goodluck to all of us and have a great day ahead of you guys!

you completely misunderstood the point of all this in my opinion.
basically things like this are proving that bitcoin's performance and dominance is not about its price and what it does in short term. instead it is about the only important thing which is adoption. and this shows that the adoption is growing despite the fact that price has gone down in short term.

[dablatair]

Hello,

Even if numbers are questionnable, I think it is a good information to share that show that there is more and more common people that going to invest and hold their BTC. IT will take time and need to have more autorisation and availibility worldwide in order to increase this access and acceptance.

Another good signal in the good way, lets be patient and we will see the common use for everybody.

[Pursuer]

To be sure, bitcoin is still predominantly held as an inactive investment, whether custodied by an institution or individual, with 6.3 billion held in accounts that had no activity in over a year, according to Chainalysis data.

Wait, 6.3 billion what? US Dollars? Weren't people always taught to include units as a kid lol.

There's one thing that aligns with my observations though:

Whether bitcoin users are transacting with personal wallets or exchange accounts, Chainalysis economist Kimberly Grauer said the monetary aggregates for these categories have stabilized, suggesting news articles don't spur as much dramatic trading activity as they did last year.

Either way, we obviously can't trust the actual numbers' precision, but I feel like if there's anyone who's qualified to come up with numbers like this, Chainanalysis is. I'm quite inclined to believe them.

sometimes these articles have a purpose of advertising a certain service though. I am not saying t his is the case for sure but it certainly looks like it as there is no other reason for doing such analysis in first place. and the results of it are somewhat predictable. in other words you could have guessed that bitcoin adoption has been increasing and with it obviously there will be more distribution hence less coins in one address/wallet.
no to mention that two major events led to a lot of  funds moving around: 1. the ATH which makes anyone sell at least something. 2. the dozens of bitcoin forks which were practically free money giveaway and people moved funds around hence the more transactions

[jseverson]

-snip-

sometimes these articles have a purpose of advertising a certain service though. I am not saying t his is the case for sure but it certainly looks like it as there is no other reason for doing such analysis in first place. and the results of it are somewhat predictable. in other words you could have guessed that bitcoin adoption has been increasing and with it obviously there will be more distribution hence less coins in one address/wallet.
no to mention that two major events led to a lot of  funds moving around: 1. the ATH which makes anyone sell at least something. 2. the dozens of bitcoin forks which were practically free money giveaway and people moved funds around hence the more transactions

I see where you're coming from. This is the crypto world, and it's only smart to question people's motives. You're correct that this could very well be a marketing attempt. You're also probably correct that they only really stated the obvious for people who can connect the dots. I still welcome these figures though. I mean, everything we say is really just conjecture until someone shows up with numbers. These confirm some suspicions, at the very least. Maybe it will also get people to stop complaining about whales because it paints a picture where coins are distributed a bit better.

That is all, of course, assuming that they're actually good at what they do and that the numbers are as close to accurate as possible. I don't think there's really a way to confirm that though.