BTC: 36% in Circulation Lost, 23% Held by Speculators, US Tax Authority Monitoring

BTC Investors and Speculators Have Held Their Positions Over the Summer
Chainalysis recently updated their year-long study of the bitcoin core (BTC) money supply, Spring to Spring, 2017 to 2018. Initial findings of that previous period “revealed long-term investors sold approximately $24 billion of bitcoin to new speculators between December 2017 and April 2018, with half of this activity occurring in December alone. This unprecedented injection of liquidity served as a fundamental driver behind the price decline during the same period,” Chainalysis maintained. Obviously, when those who once held a financial product sell, the price falls and can do so dramatically. The latest findings, however, include data through August, and conclude “that bitcoin investors and speculators have held their positions over the summer.” Chainalysis combined their existing knowledge of on-chain activity with their previous money supply work. Interestingly, they appear to be mirroring tactics and methodology employed by the Federal Reserve, the US central bank. “The Federal Reserve,” researchers noted, “for example, tracks various measures of U.S. dollar money supply and their relationships with important economic variables, including GDP growth and inflation.”

Maturation and the Taxman is Coming
The firm has so many data sets that it can rather easily determine which wallet addresses are investors, which are speculators, and even the amount of lost coins. Speculative investors are determined through liquidity and “services for transactions.” Un-liquid coins, ones not mined or simply lost or held, offer a sharp contrast from which researchers are able to “categorize the money supply into monetary aggregates known as M0, the most liquid category, through M3, the least liquid.” The previous study found dumping from new speculators and investors (long-term investors sold $30 billion worth of bitcoin), which, of course, crashed the price at the end of 2017. Since that calendar window, however, a few things have changed. Taking the data further, through last month, “reveals marked stability in each of the monetary aggregates … [All] the monetary aggregates have been extremely steady over the summer months. Specifically, the amount of bitcoin held for speculation (M0) has remained stable between May and August at around 22% of available bitcoin. Similarly, the amount of bitcoin held for investment remained stable during the summer at around 30%,” the study notes.
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Images courtesy of Shutterstock, Diar, Chainalysis.
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The post BTC: 36% in Circulation Lost, 23% Held by Speculators, US Tax Authority Monitoring appeared first on Bitcoin News.Images courtesy of Shutterstock, Diar, Chainalysis.
At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even look up the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.
Bitcoin Core (BTC) Chainalysis crypto economy diar Internal Revenue Service (IRS) N-Featured The Federal Reserve