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A recent study about Bitcoin money supply reveals that long-run investors sold bitcoin worth $24 billion to the new speculators during December 17 to April 2018. This resulted in the unprecedented decline of Bitcoin price during this period. After that, the thorough research has gathered fresh and updated data from which it can be understood that these Bitcoin investors as well as speculators have decided to maintain their positions over the entire period of summer.
Between December 17 to April 2018, tons of new speculators flooded the market while existing long-term investors liquidated most of their Bitcoin holdings at higher valuations. From studying data collected over a few more months it could be further interpreted that there was marked stability in every monetary aggregate as these have been thoroughly steady over the summer months. The total amount of M0 Bitcoins (i.e. Bitcoins held for speculation) has remained fairly steady over the months of summer.
In case of cryptocurrency, it is clearly important to build an understanding of the underlying economic signals. People no longer stick to markets randomly based on hype, but instead they try to identify and monitor the clear logical signals. In such scenarios data plays an important part.
The recent study regarding this matter has additionally revealed that the market has become less sensitive to random hype. This means that each and every random item of news does not have the ability to push the prices of Bitcoin further down or up. The study further indicates that new participants have entered the market having different levels of expectations and beliefs which has caused the market to re-calibrate itself.
A prior research from Chainanalysis in June shows that since December 2017, the total amount of Bitcoins held by only day traders has increased to 5.1 million BTC. This brings them at a par with long-term investors who account up to 6 million.
Neither speculators nor long-term investors seem to have changed their positions much during the months of summer. This somehow suggests that the Bitcoin market might experience a major move in response to a decisive change and this could be either for better or even for worse. For instance, new use cases, restrictive regulations and technological improvements can catalyze this change. Nevertheless, the continuous presence of both speculators and long-term investors indicate that bitcoin has managed to maintain the growth rate of its user-base.