Bitcoin Profitability for Long-Term Holders Drops to 4-Year Low: Data

The drop in profitability for long-term holders reached an all-time high during the peak of the bear market in 2018. However, the market bottomed out and rebounded in the previous cycle.

The long-term profitability of Bitcoin (BTC) has fallen to levels not seen during the previous bear market in December 2018. According to data shared by crypto-analytics firm Glassnode, BTC holders are selling their tokens with an average loss of 42%.

Bitcoins long-term holders. Source: Glassnode

Data from Glassnode indicates that long-term holders of the leading cryptocurrency selling their tokens have a base cost of $32,000, which means that the price average purchase price for those holders selling their stack is over $30,000.

The current market slowdown, coupled with declining profitability, can be attributed to several macroeconomic factors. The BTC market still has a strong correlation with the stock market, especially tech stocks, which are currently experiencing an even bigger downtrend than crypto.

Rising inflation coupled with the inability of central banks to control it has also compounded the pain for BTC investors. With far less to invest, traders and long-term holders are turning to short-term profitability and less risky assets.

This is also apparent from BTC miner sales, BTC miners have always been long-term holders in anticipation of higher profit. However, rising energy costs, coupled with increasing difficulties in mining, have squeezed profit margins for these miners, forcing them to settle for short-term profits.

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Bitcoin miner balance has seen significant outflows since prices were rejected from the local high of $24.5k, suggesting that overall miner profitability is still below one degree st ...