The cryptocurrency market is experiencing a significant shift, evidenced by a surge in Bitcoin millionaires. In 2023, the number of addresses holding over $1 million in Bitcoin has more than tripled, reaching a staggering count of over 81,000.
This remarkable increase, representing a 237% growth since January, coincides with Bitcoin’s price rally, surpassing the $37,000 threshold.
Bitcoin Millionaires Multiply
Bitcoin has been on a remarkable ascent, nearing $38,000 last week and hovering around $37,000 in the early hours of Monday. This price increase reflects Bitcoin’s strong market performance and indicates a larger trend taking shape in the crypto market. Indeed, the spike in Bitcoin millionaires has been substantial, nearly tripling year-to-date.
Short-term Bitcoin holders have also benefited from this upsurge by selling and raking over $1.8 billion in profits. This contrasts with long-term holders, who have been in an accumulation phase before the upcoming Bitcoin halving.
“The majority of inflows into exchanges are attributed to short-term holders, indicating significant profits gained from the recent rally. Short-term Bitcoin holders have been potentially taking profits, and this activity could be influencing the market dynamics,” a verified author at CryptoQuant said.
Number of Bitcoin Millionaires. Source: Glassnode
This bullish trend in Bitcoin’s price and the increasing number of millionaires in the market is underpinned by strong liquidity trends. Data from Glassnode, a leading on-chain market intelligence firm, suggests that Bitcoin’s available supply has hit a historical low, indicating a tightening supply and a reluctance among existing holders to sell.
Institutional Interest Spikes
Moreover, open interest in Bitcoin and Ethereum crossed the $20 billion mark for the first time since the FTX collapse. This is indicative of heightened market activity and interest level.
Indeed, these trends are further supported by institutional capital. The increasing market share of the Chicago Mercantile Exchange (CME) suggests it is a preferred venue for large traditional finance companies to get exposure to crypto.
“Bitcoin futures open interest on CME has overtaken Binance, a sign that institutions are serious about getting their feet wet and are betting on a potential spot ETF (exchange-traded fund) approval. Perpetual funding continues to be elevated, while term forwards and risk reversals continued their grind higher throughout the week,” analysts at QCP Capital said.
Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach
Open Interest Binance vs. CME. Source: Glassnode
Additionally, the order book depth for Bitcoin and Ethereum has tightened despite the strong price increases. This suggests a relative lack of sellers compared to buyers, further supporting the bullish market sentiment.
The annualized realized volatility for Bitcoin and Ethereum also remains relatively low, further reinforcing the stability of the current market rally.
“Right now, funding rates are at the highest level since October 2021, when Bitcoin reached its last historic price high. This value suggests that optimism is prevailing in the market, driving a high number of futures contracts to bet on an increase in price,” Cauê Oliveira, head of research at BlockTrends, said.
Read more: 7 Must-Have Cryptocurrencies for Your Portfolio Before the Next Bull Run
The ongoing crypto rally, characterized by a significant price increase in Bitcoin and altcoins like Chainlink and Solana, indicates a shift in the market dynamics. It might start the next bull market, driven by institutional investors and a market with relatively few sellers.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
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