Bitcoin Holders in the Red: What the Numbers Really Mean

More than 80% of short-term Bitcoin holders are currently losing money on their BTC positions, according to a popular on-chain analyst. But what does this really mean for the market?

A Look at the Numbers

The pseudonymous on-chain sleuth known as Checkmate tells his 97,000 followers on the social media platform X that the short-term holder (STH) metric looks similar to charts in 2018, 2019 and mid-2021, all of which signaled investor panic and incoming bearish trends. The analyst defines STH as entities that have held their coins for less than 155 days.

Bitcoin price chart showing recent fluctuations

But the analyst says this time could be different because while a huge number of short-term holders are in the red, their cost basis is not way below the current value of BTC. In fact, the magnitude of unrealized loss is just 4% of the market cap.

Just because a coin is held below its cost basis, it doesn’t tell us how bad it is. Being under by -1% is very different psychologically to being under by -20%.

A Different Story for Long-Term Holders

The trend also appears limited to short-term holders. Overall, 81% of Bitcoin investors are making money at the current BTC price, according to the crypto analytics firm IntoTheBlock.

Percentage of Bitcoin investors making money

Miners Still Making Profits

Checkmate also estimates that the average price to mine Bitcoin is currently around $57,200, indicating that miners are still making profits at current levels.

Bitcoin mining rig

I can only imagine miners are white-knuckling the current environment, and barely profitable. For HODLers, this is largely irrelevant (and expected). For miners and shareholders… hope for a rally.

Conclusion

While the numbers may look bleak for short-term Bitcoin holders, the bigger picture tells a different story. With long-term holders still in the green and miners making profits, the market may not be as bearish as it seems.

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