Shrimps are entities with less than 1 Bitcoin, so your typical retail investors. Whales obviously hold loads of Bitcoin. Normally, shrimps buy high and sell at a loss, yet whales buy low and sell at a profit. This is why retail tends to lose money. With this knowledge, there's two worrying statistics.
(1) Shrimps are buying lots of Bitcoin!
We saw the biggest spike of shrimps buying Bitcoin in 2022 and this trend has continued throughout this year so far. Shrimps are stacking so hard they are the most active accumulators of bitcoin in 2023 and now hold 7% of Bitcoin supply.
Some present this as bullish. However, more often than not, retail is the majority and the majority loses money.
The price chart of Bitcoin with shrimp buying volume in orange (higher = more buying); Source: Glassnode
(2) Whales have been distributing since early 2021
The percentage of the market cap of Bitcoin owned by Whales has steadily been going down since 2021. So in a sense, whales have been distributing since early 2021. This trend is continuing this year. The supply per whale did stabilize at around 5350 Bitcoin per whale.
Lightblue line is the % of the market cap held by whales. Source: Glassnode
- Is this great for Bitcoin and us because the supply is getting more fairly distributed?
- Is this time different or does this data suggest at more pain to come?