Bitcoin adoption remains strong even under bearish conditions, Bitfinex says

In a set of data derived from various surveys, Chainalysis compiled an index of cryptocurrency adoption in traditional markets and society as a whole. Other The Asia-Oceania axis remains the third largest market in cryptocurrency adoption in the world.

In addition, this region is the fastest growing in terms of new market entrants. Citizens of these countries received 932 billion worth of cryptocurrencies from July 2021 to June 2022. Cryptocurrency adoption and growth in the region has been resilient despite poor market conditions.

The region is also home to seven countries that topped this year’s index: Vietnam (1), Philippines (2), India (4), Pakistan (6), Thailand (8), Nepal (16) and Indonesia (20).

CSAO countries mapped by cryptocurrency holdings growth. (source: Chainalysis)

As Bitfinex points out, overall adoption has slowed worldwide in the current bear market, but remains above pre-bull market levels. She claims the data shows that global adoption has stabilized over the past year, after steady growth since mid-2019.

“We see this trend in the chart below, where we apply our indexing methodology globally, summing the results for all 154 countries quarterly from the second quarter of 2019 to today, and re-indexing that number to show adoption growth over time around the world,” He said.

Global Cryptocurrency Adoption Index Quarterly Results Chart.

The company points out that the data suggests that many of those attracted to the price growth in 2020 and 2021 have remained and continue to invest a significant portion of their capital in digital assets. Large long-term cryptocurrency holders continued to keep the market bearish.

“So even though their portfolios lost value, those losses weren’t blocked because they weren’t sold — data on the chain suggests these owners are optimistic the market will recover, keeping market fundamentals relatively healthy,” he says.

Optimism continues in the long term

Bitcoin addresses are anonymous, meaning that while we can easily see which addresses contain the most Bitcoins, we can only identify who is behind each through extensive blockchain analysis or if the entity behind them comes forward.

Data from BitInfoCharts shows that the top Bitcoin wallets are owned by cryptocurrency exchanges, meaning they hold the assets of multiple users. The data shows five Bitcoin addresses with between 100,000 and 1 million BTC on them. Four of them have been identified and belong to stock exchanges.

“While the above discussion is interesting, what supports our previous statements and provides more useful data is that the number of HODLers in the top 5 categories (up to 0.1 BTC) has increased in bear market conditions since April 2022, which is irregular compared to previous bear market data. This is further evidence for retail investors and cryptocurrency adoption is growing even as macro conditions face headwinds,” he said.

Realized price for BTC spot holders against price. (source: lookintoBitcoin.com)

Buy now to earn later

Bitfienx also highlights the realized Bitcoin price which is the value of all Bitcoins at the price they were purchased at, divided by the number of Bitcoins in circulation. This gives us the “average cost basis” on which all the Bitcoins were purchased, which is another way of describing the realized price. Currently, the realized price is 21,300 dollars.

“We are currently in a period of consolidation where the actual market price of Bitcoin is below the realized cost. Historically, these conditions have provided a good buying opportunity; and the accumulation metrics point to the same view. The realized price for the term holder and the realized price for the long holder are now within $200 of each other,” he says.

Paulo Boghosian, co-head of TC Cripto, also highlights the growth scenario for cryptocurrencies even though prices are in a downward trend. He points out that the fact that attracts more attention is the behavior of HODL in Bitcoin, which is reaching its historical peaks, that is, more than 80% of coins are from owners of coins with more than 3 months in their wallets.

“This data shows high buyer confidence, even more so than in 2020 when well-known investor Stanley Druckenmiller claimed that the fact that more than 70% of investors hold their coins long-term was an important factor in their decision to buy BTC,” he said. He said.

“Another indicator that speaks of the investor’s belief is the age of the currencies that move. We are currently at a minimum in this indicator, that is, the old currencies do not move,” he analysed.


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Disclaimer: This is not an investment recommendation, and the opinions and information contained herein do not necessarily reflect the views of Cointelegraph Brasil. Every investment must be accompanied by research and the investor must be informed before making a decision.

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