• The number of Bitcoin wallet addresses holding a non-zero balance has hit a new all-time high, suggesting the continued global adoption of Bitcoin.
• This increase was largely driven by an influx of new investors in January 2021, following 40% surge in Bitcoin’s price.
• The majority of these new investors belong to the ‘Shrimp’ category (holding less than 1 BTC).
Record High Non-Zero Address Count
The number of Bitcoin wallet addresses holding a non-zero balance has hit an all-time high this week, suggesting the ongoing global adoption of the world’s largest cryptocurrency. According to data presented by crypto analytics firm Glassnode, the number of addresses with a non-zero balance rose above 43.8 million on Wednesday 8th January – surpassing the previous record high printed back in mid-November 2022.
Price Surge Attracts New Investors
The recent rise in non-zero address numbers is being accompanied by a rotation in Bitcoin ownership away from larger investors and towards small ones, as evidenced by the surge in wallets holding less than 1 BTC (or ‘Shrimp’ wallets). This suggests that the influx of new investors has been spurred by a 40% surge in Bitcoin’s price since the start of 2021 – brought about by optimistic macro outlook for 2023 and increasing on-chain/technical signs that suggest we are over the bear market.
FTX Collapse Triggers Shift Towards Self Custody
Back in November 2022, when one of the largest cryptocurrency exchanges FTX collapsed and customers lost access to billions worth funds, it triggered a shift towards self custody amongst investors who rushed to get their coins off exchanges. This increased address numbers at that time but capitulation amidst jitters about contagion from FTX bankruptcy led many wallets disposing all their BTC – resulting into an equally swift pullback in non-zero address counts.
Potential Impact on Price
It remains unclear what effect this renewed influx of small investors will have on Bitcoin’s price trajectory going forward. It could be argued that these holders may not hold their Bitcoins for long due to speculation or FOMO – meaning they might sell quickly if prices falter again – leading to another downward spiral for BTC prices. On the other hand, this fresh capital could also provide fuel for yet another bull run if buyers manage to maintain their positions amid rising prices and bullish sentiment spreads through industry commentators and influencers alike.
Whilst it is difficult to predict how exactly this renewed interest from small investors will affect future movements in Bitcoin’s price, what can be said with certainty is that increased adoption remains key for any sustained success within crypto markets going forward.