Welcome to the third metric that Bitcoin investors should be tracking. The metric we will discuss in todays newsletter is “1 Year+ HODL Wave”.
If you missed the second metric, you can read it here.
To start, if you’re a newbie to the space I would like to welcome and congratulate you for finding Bitcoin! The term HODL is a crypto term that simply means to hold Bitcoin for a long period of time. A HODLer doesn’t sell or spend their Bitcoin.
Why is this important?
Investors that HODL Bitcoin likely believe in its store of value narrative similar to Gold. The great thing about blockchain technology is we can track how long someone has been holding their bitcoin in a wallet and has not moved it to another wallet. With this data we can get an idea of the current sentiment of investors. You may have heard the term UTXO, which stands for unspent transaction output. This essentially means Bitcoin that have not been transacted since their last transaction. So, a UTXO that’s greater than 1 year is Bitcoin that hasn’t moved wallets for 1 year+.
Here is a chart that shows the percentage of Bitcoins current supply that hasn’t moved wallets in 1 year+.
As you can see, the overall trend shows the percent of Bitcoin not moving for 1 year+ is in an uptrend. Currently, we’re at about 62% of Bitcoin are UTXO’s greater than 1 year. However, you can also notice that at periods where the Bitcoin price peaks the 1 year+ HODL Wave bottoms. That is because during price peaks, investors that have been holding for a while have likely accumulated at lower prices and are now ready to cash in and wait for the price to start pulling back to re-enter.
Over time, more and more people that get into Bitcoin are deciding to stay long-term and use the infamous HODL strategy. As the percent keeps increasing, the store of value narrative of Bitcoin becomes more obvious. Many consider Bitcoin the new Gold. What do you think?
Let’s connect on Twitter. Looking forward to hearing your thoughts and feedback.
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Let me know if you think Bitcoin is the new Gold.