- Bitcoin investors have the option of either long-term or short-term investment strategies.
- A new study, however, reveals that up to 62% of them choose the long-term option.
- Although there are varied reasons for the investors opting for the long haul, they remain critical players in BTCs stability and prospects.
Bitcoin (BTC) investors have been on a wild ride over the last year. The king crypto’s prices have surged and crashed, with no apparent rhyme or reason. This volatility has led some to question the longevity of Bitcoin as an investment. But if you look at TipRanks’ BTC ownership data, you’ll see that most Bitcoin investors are long-term holders (LTHs).
According to a recent data presentation by BanklessTimes.com, 62% of BTC enthusiasts are LTHs. Another 32% are likely to hold it for between a month and a year. Meanwhile, the remaining 6% would only do so for under a month.
But who is a long-term holder, and what’s the motivation behind their investment strategy? In the context of Bitcoin, LTHs are investors who buy and HODL the cryptocurrency. That’s to say, they hold the digital asset for a long period, usually more than a year.
LTHs are not interested in trading it for short-term profits. Rather they believe in the long-term potential of the coin and want to hold on to it until it reaches its full potential.
Why Do These Investors Choose to HODL?
BanklessTimes CEO Jonathan Merry has analyzed the data and weighed in on the findings. He explains that there could be different reasons for an investor choosing to HODL the digital asset rather than acquire it for short-term speculative purposes.
The CEO explains:
BanklessTimes CEO Jonathan MerryA majority of Bitcoin investors are a patient bunch. LTHs are simply bullish on Bitcoin’s long-term prospects and believe that the currency will only continue to appreciate despite the occasional market bearishness.
Merry suggests that BTC’s price history has played a major role in convincing many investors to keep it for the long haul. He singles out the coin’s rise from exchanging at less than a dollar in 2010 to $18,784.30 at the time of writing.
And though the king crypto has taken a hammering in recent months from an all-time high of over $68,000, its value has generally risen with time.
Bitcoin as a store of value
Moreover, other LTHs see Bitcoin as digital gold and choose to hold on to it as a store of value. Some investors deem Bitcoin as a perfect hedge against stock market volatility. They contend that measured against stock market fiat currencies, BTC tends to be more resilient in inflationary conditions.
That said, this suggestion is coming under sharp scrutiny following the spectacular plunging of the coin over the past year.
There are also some psychological factors at play. Many LTHs view their BTC stash as part of their investment portfolio and feel uncomfortable cashing out. They may fear missing out on future price increases if they sell now.
Still, others believe that Bitcoin will eventually replace traditional currencies and want to be prepared for when that happens. Finally, many LTHs simply enjoy being part of the Bitcoin community. They believe in the ethos of decentralization and transparency that underpins the cryptocurrency world.
What Does This Mean for the Future of Bitcoin?
The fact that most investors are LTHs is good news for the overall health of the BTC community and its long-term prospects. These investors show confidence in the digital asset and its potential for future growth. This could help spur even more adoption and use cases for crypto, leading to even further price increases down the road.
Moreover, LTHs are important because they provide stability in the market. They’re less likely to panic and sell during market downturns, which can help to stabilize prices. In addition, they’re more likely to advocate for BTC and its use cases, which can help grow the overall currency adoption.
Whatever the reason, there is no doubt that LTHs play an important role in the growth of BTC. By holding onto their coins for a long period, they are helping to ensure that the cryptocurrency will continue to rise in value. And as more and more people develop an interest in BTC, the importance of LTHs will only continue to grow.
