• Most Bitcoin is held in accounts that do not trade
• Despite recent negative crypto news, hodlers expect a sharp increase in Bitcoin value
• Mega money is moving into the Bitcoin market
• How does a market faced with legal turmoil expect to thrive?

Illiquid wallets that hold crypto tokens, especially Bitcoin, have been found to control the majority of Bitcoin supply according to illiquid supply change metrics. Illiquid trends suggest hodlers predict an increase in the value of Bitcoins in the near future.

Although recent major crypto news all included legal complications concerning the biggest exchanges and lenders in the market, investors and analysts believe that Bitcoin is bound for a bright future.

Illiquid Wallets Control The Market

The illiquid supply change metric  presented by Glassnode highlights the number of cryptocurrencies held in non-trading wallets. The tool compares the number on any given day with the number on the same day of the month prior. 

Among the main metrics on the platform is one that shows that illiquid wallets hold the majority of crypto tokens in the market, especially Bitcoin. Moreover, the platform shows that in the past four weeks, illiquid wallets have gathered a record-high amount of Bitcoins. Illiquid wallets now hold Bitcoins worth over $3.9 billion. These wallets have gathered over 215,000 Bitcoins in the past few weeks alone.

Why would Bitcoin holders keep their tokens, considering all the negative news surrounding the crypto market? 

The Bad News

To summarize troubles surrounding the crypto market, one must look at the SEC, and crypto exchanges, namely Binance and Coinbase.

• Binance, the world’s biggest crypto exchange is facing thirteen lawsuits filed by the US Securities and Exchange Commission, alleging crimes such as evasion of US regulators, wash trading, and commingling customer funds. The lawsuits have pressured Binance US to halt all USD transactions and suspend OTC trades.
• Binance is also showing signs of withdrawal from the European market; deregistering from Cyprus, the Netherlands, and the UK.
• Coinbase, the biggest US-based crypto exchange is in a legal battle against the SEC. The regulating commission claims the exchange traded in “unregistered securities”.
• Ripple, another US-based crypto exchange was also allegedly trading in “unregistered securities” according to the SEC.

The Good News (Sort of)

There must be a plausible reason why Bitcoin holders feel optimistic about the future of the crypto token. These are some of the main reasons:

• Bitcoin was never the center of any of the lawsuits mentioned above. This shows an ominous future for altcoins, but a bright future for the first-mover cryptocurrency.
• SEC Chair Gary Gensler has affirmed on several occasions that he does not see Bitcoin as a security, but a commodity. This protects Bitcoin from legal challenges posed by the SEC regarding the trade of the crypto token.
• Binance just announced the integration of the Bitcoin Lightning Network which will not only speed up transaction processes but also require lesser fees for each transaction.
• Huge asset management firms, Fidelity and Blackrock, will soon pump exuberant funding into the Bitcoin market, likely skyrocketing Bitcoin prices.

Hodlers Might Be Onto Something

Considering all the financial, technological, and legal factors involved, Bitcoin will not only likely be the sole survivor of the ongoing crypto battle with the SEC, but it’s even more likely to shoot up in demand following the imminent dominance of the world’s wealthiest corporations on the market. 

Perhaps the goal behind the SEC’s battle against the crypto market, along with corporate attention to only Bitcoin is to eliminate all altcoins, rendering Bitcoin the only viable digital currency used in the US.