Is hoarding coins popular again? 21.6% of Bitcoin supply has not moved in at least 5 years, a record high

New data from Coin Metrics shows that the number of untransferred Bitcoins has risen to a new high. Does this mean that Bitcoin is a better store of value, or does it still have potential as a medium of exchange?

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Is Bitcoin Hoarding Coming Back into Style?

Today, Matt Odell, crypto analyst and co-host of the Crypt podcast, noted that the amount of untouched Bitcoin has grown significantly over the past five years. Odell cited a Coin Metrics chart that shows that Bitcoin's "untouched supply" recently hit a new all-time high. These untouched or untouched coins are those that have not been moved from a particular wallet, and the chart measures Bitcoin that has been held for between 180 days and two years.

The data shows that Bitcoin is becoming a store of value rather than a medium of exchange, but the significance of this view varies depending on the individual's reasons for buying Bitcoin. Those in the "Bitcoin to $100,000" camp will use this data to support the view that Bitcoin is entering a bull market that will be far higher than its previous all-time highs.

Others, like Willy Woo, may express concern that the lack of Bitcoin circulation could lead to lower volatility, causing the asset to mirror the price movements of commodities like gold. Earlier today, Adaptive Capital partner and crypto analyst Willy Woo tweeted a chart of gold prices over the past century.

Essentially, Woo expressed his concern that if the majority of BTC is held by a small number of wealthy individuals, then this group will become the “new bankers.” The fact that Bitcoin has a limited supply and large institutional investors have been steadily hoarding cryptocurrencies throughout 2018 means that Bitcoin deserves some attention.

Will the “number of untouched coins” continue to rise?

Tuur Demeester quickly responded to Odell’s tweet, saying: “I’m not so sure… 5 years is a long time in Bitcoin not to update your cold storage. It seems to me that most of these coins are probably lost.” Further investigation of the Coin Metrics chart shows a clear rise in the number of “untouched coins” on the 180 day and 1 year timeframes compared to the longer timeframes, and this rise corresponds to a rise in Bitcoin’s price in USD.”

Coin Metrics also noted:

“While BTC supply has continued to grow, the percentage of BTC supply that has not moved in at least 5 years has recently reached a new high of 21.6% of total supply.”

If the Coin Metrics data is taken literally, it seems reasonable to assume that the number of untouched Bitcoins will increase as the price of Bitcoin continues to rise. However, as Bitcoin approaches its all-time high, it is also possible that long-term Bitcoin holders will exit their positions. When Bitcoin reaches its previous highs, these holders are likely to be influenced by the future rise of Bitcoin and its technical background.