In today's booming era of digital currency, Bitcoin has always been the first choice for many investors. However, it is little known that more than 30% of Bitcoin is inactive, which means that a large number of Bitcoins are held in wallets for a long time and do not participate in transactions. What is more surprising is that the largest Bitcoin holder is not an individual, but an exchange. What secrets are hidden behind this phenomenon? Let's unveil the veil of the crypto world and explore the role of exchanges in the Bitcoin market.

 Bitcoin Inactive Status Revealed

The soaring value of Bitcoin has attracted the attention of countless investors. However, according to data, more than 30% of Bitcoin has been inactive, which means that this part of Bitcoin has not been used for a long time and almost no transactions have occurred. There may be multiple reasons behind this phenomenon, one of which is the confidence of holders in the future value of Bitcoin. As one investor said: "Bitcoin is like digital gold. I believe its value will continue to grow, so I choose to hold it for a long time."

 Exchange: Bitcoin's Largest Hodler

Although individual investors play an important role in the Bitcoin market, the largest Bitcoin holder is the exchange. As a platform for digital currency transactions, exchanges not only provide trading services, but also hold a large amount of Bitcoin as liquidity preparation. This practice not only helps exchanges cope with trading peaks, but also provides users with a faster trading experience. An exchange staff member revealed: "We hold a large amount of Bitcoin to ensure that users' transactions can be completed quickly, and it is also a stabilizing force for the market."

 Changes in Bitcoin Value

As an investment asset, Bitcoin has a large value fluctuation and has experienced many bull-bear transitions. In the past few years, the price of Bitcoin has soared to a historical high, attracting the attention of a large number of investors. However, with the continuous tightening of regulatory policies and the intensification of market volatility, the price of Bitcoin has also fluctuated significantly. In this regard, an investment expert pointed out: "Bitcoin is a high-risk and high-return investment. Investors need to have sufficient risk tolerance and long-term vision."

 Risks and Challenges of Exchanges

As the largest holder of Bitcoin, exchanges also face many risks and challenges. On the one hand, exchanges need to continuously strengthen security protection to prevent the risks of hacker attacks and loss of digital assets; on the other hand, changes in regulatory policies have also brought certain uncertainties to exchanges. A risk management expert at a digital currency exchange said: "We always pay attention to market dynamics and strive to improve security and transparency to ensure the safety of user assets."

 Future Outlook and Thinking

With the continuous development of blockchain technology and the increasing maturity of the digital currency market, Bitcoin, as the representative of the first blockchain application, will continue to play an important role. In the future, with the participation of more institutional investors and individual investors, the Bitcoin market will become more active and will face more challenges and opportunities. As investors, we need to remain rational, treat digital currency investment prudently, seize investment opportunities, and also pay attention to risk control and make good asset allocation plans.

 Summary

As a representative digital currency in the crypto world, Bitcoin carries unlimited possibilities and challenges. More than 30% of Bitcoin is inactive, and exchanges have become the largest Bitcoin holders. Behind these phenomena are rich market connotations and investment logic. In the wave of digital currency, we need to keep a clear head, invest rationally, seize opportunities, and meet future challenges. The crypto world has never been so exciting. Let us witness the glorious moment of digital currency together!

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Over 30% of mined Bitcoins are inactive, and exchanges are the biggest hodlers! As we all know, the total supply of Bitcoin is capped at 21 million. Its block reward is halved every four years, which means that the annual supply is halved, thereby achieving the effect of controlling inflation and avoiding artificial manipulation. But with a stable supply, how many Bitcoins have been mined? Are all mined Bitcoins active?

Image source: pixabay

The answer to the first question is simple. The number of mined Bitcoins is slightly more than 18,290, accounting for more than 87% of the total supply, and the number of unmined Bitcoins is about 2.7 million. Bitcoin miners mine about 144 blocks per day, each containing 12.5 Bitcoins, that is, 1,800 Bitcoins per day, and soon, by May, this number will drop by half.

Now, let's look at the second question, are all mined Bitcoins active? Well, while the first question tells us that 18.29 million Bitcoins have been mined, it does not mean that they are active and circulating.

According to data released by Unchained Capital on April 1, 2020, the HODL
Wave index, which tracks Bitcoin’s unspent transaction outputs (UTXOs) in the past 2-3 years, has fallen below 15% to 14.98%. This means that about 15% of the mined Bitcoin has been idle for 2-3 years.

This 15% is equivalent to 2.74 million Bitcoins, which is worth a total of $18.08 billion at the market price of about $6,600 at press time.

According to data from Unchained
Capital, in a shorter time frame, 5.36% of Bitcoin has not moved in 18 to 24 months, 10.73% in 12 to 18 months, and 13.96% in 6 to 12 months.

In such a long time span, almost one-sixth of the Bitcoin in circulation has not moved at all, so where are these Bitcoins stored? Although Bitcoin addresses are the organic storage place for BTC, Bitcoin stored on exchanges has accounted for a large proportion in the past few years.

Since the crypto market bull run and subsequent winter in 2017, many exchanges have been established, their services have expanded, and the number of Bitcoin HODLers has grown accordingly, with some crypto analysts calling exchanges the "biggest HODLers."

Bitcoin price and exchange wallet balance chart | Source: TokenAnalyst

So how much Bitcoin do exchanges hoard? The answer is roughly the same as the number of idle Bitcoins.

CoinShares CEO Ryan Radloff described the number of Bitcoins on large exchanges in a blog post. According to his assessment, Coinbase is the largest "HODLer", storing 856,000 Bitcoins, and other HODLer exchanges include Bittrex, Bitfinex, Bitstamp, , Kraken and BitMEX.

Exchanges and other "intermediaries" (including Grayscale's Bitcoin Trust and BitMEX's Insurance
Fund) hold 16.6% of the total.

Therefore, from the overall perspective, only a portion of the Bitcoin is actually in circulation. 87% of Bitcoin has been mined, of which 15% has been idle for 2-3 years, and 16% has been stored in exchanges for a long time.