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As part of the “Bitcoin Valuation Report” released by asset management company Grayscale this month, the Believers and Speculators Index (HSI) showed a highly bullish divergence.
Gray pointed out that this is “similar to the structure in early 2016”
HSI measures bitcoin activity from wallets to get an impression of how network participants use BTC—and the market sentiment that results from it.
The data is compiled by Coin Metrics, an analysis resource on the chain, and coins that have not moved within one to three years are marked as “believers” holding bitcoin. “Speculator” coins refer to coins that have changed at a certain point in time in the past 90 days.
From this comparison, it can be seen that as of August, the coins held by speculators are disappearing, while the number of coins held by believers is increasing sharply.
“Bitcoin has potential because there are more and more believers than there are speculators in the market,” commented author Phil Bonello.
As reported, analysts already believe that Bitcoin’s current state corresponds to 2016, approximately 18 months before its all-time high of $20,000.
With a large number of technical indicators all flashing green, the bullish potential has not been ignored by many people.
“The percentage of Bitcoin’believers’ reached its peak, and the percentage of’speculators’ reached the bottom. This is another good indicator that the bull market has just begun.” Charles Edwards, the founder of Capriole, also an asset management company, pushed Specially added.
The number of BTC dormant for 1 year breaks the record
At the same time, the Grayscale report further reveals the strength of Bitcoin investors’ determination in 2020.
Although the price trend has changed a lot in the past 12 months, people are still keen to use BTC as an investment and do not trade or sell BTC at any price until the current annual high of $12,000.
“It is also worth noting that the Bitcoin blockchain shows that the number of BTC held for more than one year has reached an unprecedented high level,” Bonello pointed out.
“This indicator shows that the current investor community has a strong belief in Bitcoin. Although this is a supply-side indicator, it also shows the need for the use case of Bitcoin as a store of value—not a means of trading , Which shows that investors are interested in holding Bitcoin, despite its high volatility.”
The proposition of the store of value continued to be publicized this month, as MicroStrategy, which purchased more than 21,000 BTC in mid-August, confirmed that its holdings have increased to the equivalent of more than $400 million.