The possibilities with Bitcoin are endless. However, people are stuck debating if Bitcoin is a store of value or a medium of transfer. Some seek the knowledge whitepaper in an attempt to make sense of it all and add value to their points, while some take a more pragmatic approach. One thing that is sure is that Bitcoin is whatever you want it to be.
There is a strong trend of “HODL” in the Bitcoin community. The trend is quite famous with people who treat Bitcoin as gold 2.0, a store of value. Unspent transactions, more commonly referred to as UTXO, have become an important metric in the analysis and prediction of Bitcoin’s price. Coinmetrics’ Issue 9 detailed how this metric has hit a new high.
“The amount of Bitcoin (BTC) supply that has been untouched (i.e. not transferred) for at least five years recently reached an all-time high. This potentially signals that BTC is increasingly becoming a store of value, as opposed to a medium of exchange.”
As of 19 July 2019, a total of 3,847,859 BTC were found to be unmoved in over 5 years. The report also stated that although the percentage of Bitcoin’s overall supply has been increasing, untouched UTXO BTCs have risen to 21.6%-high in 5 years.
Additionally, Coinmetrics stated that UTXO BTCs tend to mirror the price movement and that the untouched BTCs in the chart below tend to peak towards the bottom of the price trough and vice versa.
Bitcoin’s scarcity is a major driver of the price of Bitcoin. This can be used as an indicator, in conjunction with market cycles to study sell-off periods and selling pressure.
Although the UTXO metric is widely used, some people suggest that it could be that these coins are probably lost.
Adamant Capital’s @Tuur Demeester suggested,
“I’m not so sure… 5 years without updating your cold storage method is a long time in Bitcoin. Imo most of these coins are likely lost.”
If this is true, it might not confirm that the HODL gang is going strong. Instead, it could be that users have lost access to their wallets and Bitcoins will sit there for all eternity.