The number of wallets holding at least $1,000 worth of Bitcoin (BTC) has increased by 20% since the beginning of 2024, according to a report released by Fidelity Digital Assets on Monday. This report indicates a continued growth in the number of addresses holding small amounts of Bitcoin, reaching an unprecedented level of 10.6 million wallets as of March 13, representing nearly double the number compared to the previous year’s estimate of 5.3 million wallets.
This trend suggests a continuous increase in the number of Bitcoin holders and the pace of adoption among small investors. Fidelity Digital Assets cautioned that this figure could be influenced by factors such as the rise in Bitcoin prices during the data collection period and the retention of these coins within their wallets.
As of April 25, the price of Bitcoin represents an 89% increase compared to its price six months ago, reaching approximately $64,150.
Investors are turning to self-custody after issues with trading platforms
The report also revealed the amount of Bitcoin held on trading platforms, which has been steadily decreasing since its peak in 2020.
Following numerous failures and problematic practices of trading platforms in 2022, the popularity of self-custody among Bitcoin holders increased throughout 2023 and continued into the first quarter of 2024. This was accompanied by a decrease in Bitcoin balances on trading platforms to approximately 2.3 million BTC, representing a decrease of nearly 30% from its all-time highs and 4.2% compared to the first quarter of 2024. However, this decline in trading platforms does not necessarily indicate a corresponding increase in self-custody.
Fidelity emphasized the importance of monitoring the decrease in the number of Bitcoin coins held on trading platforms, while highlighting the importance of alternative custody methods such as self-custody.
The decrease in the number of Bitcoin coins held for the long term contrasts starkly with the typical pattern of halving events
The report also discussed the change in the number of Bitcoin coins held for the long term, which decreased from 40,442 BTC in the third quarter of 2023 to 31,376 BTC in the fourth quarter. This indicates a significant decrease in late 2023, followed by a slight increase at the end of February 2024, only to see a significant decline thereafter, possibly due to Bitcoin reaching a new all-time high.
This pre-halving decrease is unprecedented and has never been seen in previous cycles, indicating that long-term Bitcoin investors felt that its price was exaggerated before the halving, with approximately 124,001 Bitcoin coins being sold.
