As Bitcoin heads into 2022, a growing cohort of long-term investors is doubling down on its stashes of the cryptocurrency, hoping a December dip was merely a festive blip.
According to digital currency broker Genesis Trading, since last July the amount of Bitcoin held in digital wallets with no outflows for more than five months has been steadily increasing.
Moreover, the amount of Bitcoin held in wallets, from which spend less than quarter of their inflows, is also rising. This means fewer coins are being actively traded, Noelle Acheson, head of market analysis at Genesis Trading, said. Despite Bitcoin and Ethereum showing gains of 2.9% last week, to $43,107, and 6.3%, to $3,350 respectively, they are still a long way from their 2021 highs of $69,000 and $4,868.
Many cryptocurrency experts warn that no one has been known to reliably predict Bitcoin's characteristically wild price swings. For example, in 2017 it went from about $1,000 to around $20,000. In early 2020, it sunk below $4,000 at one point before beginning a dizzying rise. However, proponents of Bitcoins and other coins say the increasing acceptance of cryptocurrencies in major financial and investment sectors has strengthened the sector in recent years.
Cryptocurrency research company Delphi Digital said their study has shown a similar shift towards Bitcoin being held for longer period by investors.
According to Will Hamilton, head of trading and research at Trovio Capital, Fear & Greed index was wavering between 10 and 29, which could be an indicator of a possible market bottom and buying opportunities. In July 2021 and March 2020, the Fear & Greed index was at 19 and 10 respectively. Thus, 0 indicates "extreme fear" and 100 is "extreme greed".
Last week, the meme-based Dogecoin also gained attention after Tesla CEO Elon Musk tweeted that the company would accept it as payment for select merchandise. The tweet boosted dogecoin by nearly 12%.
Cryptocurrency Solana was another altcoin in the spotlight, with analysts at Bank of America saying the Solana blockchain could pull market share away from Ethereum and could become the Visa of the digital asset ecosystem.
