Two research firms have released convincing data on the state of the top coin, Bitcoin. A report from Chainalysis reveals that 36% of BTC in circulation is lost, likely lost or unmined. Speculators hold 22% while a steady number of 30% are investors.

A few months ago, Chainalysis revealed news about the BTC money supply. They found that long-term investors sold around $24 billion of Bitcoin to new speculators between December 2017 and April 2018, and half of the selling happened during December. When those who once held a financial product sell, the price falls and can do so dramatically, which we saw earlier this year.

However, the latest finding, that includes data through August tells us that Bitcoin investors and speculators have held their money over the summer. Chainalysis seem to be mirroring tactics and methodology employed by the Federal Reserve, the US central bank. “The Federal Reserve,” researchers noted, “for example, tracks various measures of U.S. dollar money supply and their relationships with important economic variables, including GDP growth and inflation”. Chainalysis explains:

“For emerging financial systems, such as the crypto-economy, building an understanding of the underlying economic signals is a key factor in empowering participants to make more informed decisions. People are simply less likely to stay in and are less well served by, a market that appears random and based on hype. If we can identify and monitor clear signals —and those signals are logical— more people will feel comfortable investing. That’s where data can play an important role”.

Chainalysis updated data shows that the market is getting more stable regarding each of the monetary aggregates. They have all been steady over the summer months, and especially the amount BTC held for speculation has remained stable between May and August at around 22% of available Bitcoins. The same is seen when looking at the amount held by investors; it has remained stable around 30%. Furthermore, they argue that it is a sign that the market is less sensitive to hype where news cannot push Bitcoin price up or down in the same manner as before. Chainalysis concludes on an up note, “As such, the first challenge of adoption — getting cryptocurrency into people’s hands— has been overcome, but we are now waiting to see what the next stage of adoption looks like”.

Bitcoin holds 51,2% of the markets total capitalisation according to Coinmarketcap.com, and the total market cap for all coins hovers around $222 billion.

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