“Not Moved” Bitcoins

According to a report written by Coin Metrics analyst Jacob Franek, as of March 1, 2020, roughly 42% of all BTC has not moved on-chain in more than two years. The metric is the largest number since June 2017 and the study notes that “HODL waves” have grown larger.

What is ‘HODL waves’?

The HODL WAVE in very short is a specific behavior of Bitcoin transactions that we can see on the blockchain. It was first described by unchained capital who rendered a graph and an analysis of the transaction behavior.

Hodl, a term coined in an internet forum meaning ‘Hold on for dear life’ is seen as the original strategy when investing in Bitcoin. Analysis of the Bitcoin network has shown that there are waves of new investors who come in waves.

As you might have noticed, Bitcoin is not simple to understand and it takes some serious effort to grow solid knowledge, hence we want to dig a little bit deeper into the logic behind the HODL wave.

42% of All the Bitcoin Has Not Moved in Two Years

On March 3, Coin Metrics published its “State of the Network” update which covers the BTC network by leveraging various perspectives and data sets. Within the report written by Jacob Franek, the researcher discusses unspent transaction output (UTXO) age analysis and HODL waves.

Franek noted other contributions to the study of HODL waves in 2014 and the writer mentioned Bansal’s 2018 research as well. Unchained Capital’s post on the subject was “instrumental in introducing active supply to a broader audience,” Franek wrote. Two more studies were mentioned (Blummer 2018 and Hauge 2019) in Coin Metrics’ report, both of which research the behavior of bitcoin holders from different angles. When mentioning Franek’s study, fellow Coin Metrics researcher Nate Maddrey explained that 42% of all BTC hasn’t moved in two years. “As of March 1st, about 42% of all BTC has not been moved on-chain (i.e. transacted) for at least two years,” Maddrey tweeted.

The HODL waves chart

The HODL waves chart shows 42% of BTC has been left unspent for two years. “The greens and blues represent Bitcoin that hasn’t transacted in a long time,” explains the HODL Wave chart website. “Bitcoin’s money supply grew from 50 BTC to ~17M BTC over this time period, so the chart has been normalized by the BTC in existence at each date (left y-axis).”

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“Not Moved” Bitcoins was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.