Bitcoin and Religious Zealots

I noticed this chart in a market commentary from Eaglebrook Advisors today. It shows actual Bitcoin holding trends using blockchain data from Glassnode.

66% of Bitcoin's supply has been held for more than a year, 38% of the supply has been held for 3-years, and 24% has been held for five years plus. Every single one of those time frames hit all-time highs last week.

Bitcoin is 65% off its high over the past year, and yet, 66% of Bitcoin's supply hasn't changed hands.

Bitcoin holders have honey badger tendencies; they don't give a #?%!.

That chart reminded me of speech Stan Druckenmiller gave years back where he specifically referenced Bitcoin holders pain threshold as something unique that drew him into the asset class.

Druckenmiller, during an interview, referenced a call he got from Paul Tudor Jones in 2017 where Jones told him Bitcoin went from 17,000 to 3,000 and 86% of the people that owned Bitcoin never sold it.

Druckenmiller recalled his thinking at the time:

"This was huge in my mind. So here's something with a finite supply and 86% of the owners are religious zealots. I mean, who the hell holds something from $17,000 to $3,000. I got to buying some just because these kids on the West Coast are already worth more than I am. For some reason, they're looking at this thing the way I've always looked at gold."

Around that time, Druckenmiller decided to buy some Bitcoin; finally purchasing some around $6,000. In typical Druckenmiller fashion, he bought $100 million over the course of two weeks. (Related: could you imagine having $100 million laying around to play with?!)

He did close the Bitcoin conversation mentioning he sold his cost basis while still owning a bit, though "his hearts never been it and he's a 68 year old dinosaur".

The past few months of crypto headlines have been ugly - bankruptcies, bailouts, leverage, charlatan behavior, and outright fraud in certain cases. But seeing the holding trends serves as a good reminder there is a foundation that crypto is built on and the community sticks with the asset as loyal as any sports fan base you can find.