The present Bitcoin bull run, buoyed by Wall Street‘s endorsement of eagerly anticipated spot exchange-traded funds (ETFs), continues to generate millionaires, albeit at a pace more gradual than the 2020-2021 surge. With Bitcoin’s market value ascending by 70% this year, breaking records above $72,000, this rally marks a notable recovery from last year’s 155% climb from the bear market’s nadir.
Data from Paris-based analytics firm Kaiko reveals a discernible slowdown in the creation of millionaire wallets, with fewer than 2,000 such wallets emerging daily. This rate contrasts sharply with the previous bull run, which saw over 4,000 millionaire wallets and more than 2,000 wallets holding at least $10 million worth of Bitcoin being created each day.
Early Stages of the Bull Run
This deceleration suggests the bull run might still be in its infancy, with the potential for increased capital inflows yet to be fully realized. Market consensus aligns with this perspective, projecting Bitcoin’s price could ascend to $150,000 or beyond in the forthcoming months, propelled by sustained spot ETF investments and the anticipated supply contraction from the upcoming halving event.
Factors Influencing Millionaire Wallet Growth
Several reasons may account for the slower millionaire growth rate during this bull run:
- New Capital Entry: Fresh investments have not yet fully penetrated the market.
- Profit Taking by Large Whales: Significant holders may be capitalizing on new highs by liquidating parts of their holdings.
- Custodial Storage: An increasing preference among whales to secure their assets with custodial services rather than in personal wallets.
Recent observations have also noted a considerable divergence in the liquidity between ask and bid sides within 2% of the market price, expanding nearly fivefold from the norm. This trend suggests an accumulation of limit sell orders as investors aim to secure profits near peak valuations.
| Bull Run Period | Daily Creation of Millionaire Wallets | Notable Market Trends |
|---|---|---|
| 2020-2021 | Over 4,000 | Rapid influx of new investors |
| Current (2022 onwards) | Less than 2,000 | Slower pace, increased custodial storage |
The ongoing Bitcoin rally, while slower in creating millionaire wallets compared to its predecessor, illustrates a dynamic market environment influenced by new investment vehicles, evolving investor behaviors, and the broader adoption of cryptocurrency. As the market anticipates further growth driven by spot ETFs and the halving event, understanding these underlying trends becomes crucial for investors navigating the crypto space. With the potential for increased inflows and the strategic actions of large whales, the landscape for Bitcoin continues to evolve, reflecting the complex interplay of supply, demand, and investor sentiment in shaping the future of digital assets.
Featured image credit: peshkova via Adobe Stock