Large and Small Players are “Stockpiling Bitcoin,” Says Kraken

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  • Kraken reports that both large-scale investors and small players are holding on to their Bitcoin.
  • The HODLer sentiment has created a supply shock which triggered the recent rally, Kraken claims.
  • The total number of whales has hit a 5-month high of around 16,120.

Research by Kraken finds that both large-scale investors and small players are holding on to their Bitcoin holdings, creating a supply shock that has triggered the recent rally.

In its October 2021 Crypto On-Chain Digest report, Kraken noted that an “End of Summer Sale,” which saw HODLers double down on their Bitcoin created a supply shock, has prompted a bull run that delivered double-digit percentage gains. Despite the fact that BTC has pumped more than 50% in price month-to-date, the report declared there has not been substantial profit-taking from long-term holders.

“Both large-scale entities and smaller players, who secure the network via mining pools, appear to be stockpiling bitcoin,” said Pete Humiston, manager at Kraken Intelligence. “We’ve seen publicly-listed mining companies, like Argo Blockchain, use bitcoin as collateral in order to secure fresh funding for further capital investment.”

While individual miners are modestly cashing out their Bitcoin holdings, big mining pools continue to hold. Further supporting the observation that holders are contributing to the Bitcoin supply shock, the total number of Bitcoin that haven’t been moved in the last six months has recently reached a three-year low of over 25%.

Other metrics like active addresses, new addresses, volume, and transaction numbers are also validating the renewed demand for Bitcoin. In comparison to September, active addresses and transaction count have risen by more than 10%, while new addresses and supply velocity have increased by around 5%. Kraken wrote:

Healthy network activity, coupled with solid long-term holding conviction, institutional miner demand, and rising prices, provides strong confirmation of the trend and highlights strong demand for BTC.

Number of Whales Hit New Record

The current bull run has seen a considerable uptick in the total number of whales (wallets with more than 100 BTC). As per data by Kraken, the total number of whales has hit a 5-month high of around 16,120. “Data indicates that much of this jump in network activity is attributable to BTC ‘whales,’” Kraken wrote.

Moreover, whales continue to push their holdings to higher levels. Since early October, the weekly average of whale holdings reached an all-time high of 11.9 million BTC ($732 billion), increasing by 0.25%. This suggests big investors are confident and prefer to accumulate rather than to take profit.

“Long-term holders were unfazed by the retracement last month and used it as an opportunity to continue accumulating, this trend has not changed despite a significant rebound in price to new all-time highs near $67,000,” Kraken wrote.