In the cryptocurrency world, trading assets is not the only way to make money. Purchasing Bitcoin and letting it sit in a wallet can work wonders too.
At this time, the vast majority of the circulating Bitcoins are “in profit”. A very interesting development, as it goes to show that “hold and wait” still works in 2020.
NOTE: A “profitable’ Bitcoin is determined as having a higher value at a certain time compared to the last time it was moved.
Circulating Bitcoins in Profit Until Late 2016
Statistics provided by Glassnode paint a very interesting picture. It clearly demonstrates that holding Bitcoin works. Since its inception, over half of the circulating Bitcoins have been in profit nearly at all times. That goes to how resilient the asset is. Moreover, it also shows how many people obtained Bitcoin at a lower value compared to the price at that time.
Several peaks in “profitability” are present. During the first year, over 90% of the circulating Bitcoins were in profit. Once the price This period lasted until the first BTC price peak of $27.26. At that time, there were no big trading platforms, and a very small community.
Following the subsequent price decline, profitability numbers dwindled. At a price of $2.92, just 47.23% of the supply remained in profit. This does include the coins belonging to Satoshi Nakamoto and other early adopters.
Following wild fluctuations, 98.32% of the circulating Bitcoins were in profit again by early March 2013. This is when the price hit $35.32. Even those who bought at the previous peak were now in profit, assuming they didn’t sell their holdings.
These ups and downs continue throughout history. Profitability of the circulating Bitcoins firmly hinges on the price at that time. Given the volatility in that department, profitability can be hard to come by. The lowest figure recorded to date is just 40.50% of the supply. This was despite a price of $226.31, but following a dip from $$1,137.82
The November 2016 – December 2017 era
It is evident from this period that a healthy price uptrend can work miracles. Between November 2016 and December 2017, the circulating Bitcoins in profit never dropped below 81.22%. An astonishing trend, albeit the Bitcoin price trend during that time was rather spectacular in its own regard.
One date to mark is May 5, 2017. On this day, 99.14% of the circulating Bitcoins are in profit. The price at the time is $1,575.69.
Interestingly enough, the same feat was achieved months later. On November 8,2017, 99.12% of the circulating supply is in profit at a price of $7,234.30. A clear example of how “hold and be patient” is often solid advice.
The Decline of 2018-2019
As can be seen on the chart, profitability of “holding” took a beating in this period. Many hoped for the upward momentum to continue. Unfortunately, that is not the case. As Bitcoin retraces, the profitability percentage drops to 41.6% among holders. Not an all-time low, but cutting it close.
The price at that time was $3,467.43. Even at this low, over 41.5% of the circulating Bitcoins are profitable to holders. Again, this includes the supply of Satoshi Nakamoto and other early adopters. However, it also shows that those who bought smaller amounts prior to mid-2017 are still in profit as well.
A new Peak Emerges
After recovering from this low, the profitability of circulating Bitcoins shoots up again. At the price of $11,886.38 in late June 2019, 92.92% of the BTC in circulation are profitable once again. Despite the price not holding, it seems that most investors, traders, and speculators held just fine.
Ever since, the Bitcoin price has not hit the $3,500 range again. However, the profitability has taken a hit by December 16, 2019. Just 56.64% of the BTC in circulation are profitable at a price of $7,075.27. Not a good sign, yet things have vastly improved ever since.
Today’s Situation Looks Healthy
As of January 22,2020, 76.05% of circulating Bitcoins are profitable. The price point of $8,693.14 certainly contributes to this fact. It is very healthy to see such a high percentage “in profit”. While it still includes balances of Satoshi Nakamoto and early adopters, the figures remain promising.
This puts an entirely different perspective on major Bitcoin price declines. With over 40% of the circulating supply remaining profitable since late 2010, there has never been anything to worry about. That does mean six in ten holders may not be too happy at a certain point, but overall, this asset is far more resilient than expected. One can only hope to see this trend continue in the decades to come.