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Shrimps and whales keep bitcoin afloat in the cryptoverse

The crypto world's shrimps have joined the whales in a spectacular last stand to end the dismal bitcoin winter. These two opposing factions are both HODLers - long-term investors in bitcoin who refuse to sell their holdings - and they are both motivated to fight back against the bears, despite their portfolios being in the negative. According to an investigation by analytics firm Glassnode, shrimps, or investors who possess less than one bitcoin, are collectively adding to their balance at a rate of 60,460 bitcoin every month, the most aggressive rate in history. Whales, or people who own more than 1,000 bitcoin, were adding 140,000 coins every month, the fastest rate since January 2021. "The market is approaching a HODLer-led regime," Glassnode wrote in a note, alluding to the group named after a trader who misspelled "hold" on an internet forum years ago. According to Glassnode, after bitcoin's worst month in 11 years in June, the decrease appears to have abated as transaction demand appeared to be moving sideways, indicating a standstill of new entrants and potential retention of a base-load of users, ie HODLers. Over the last four weeks, Bitcoin has been hanging at $19,000 to $21,000, less than a third of its $69,000 peak in 2021. "In the cryptocurrency business, there is a saying: diamond hands. If you do not withdraw, you have not truly lost the money. It's possible that it'll reappear one day "said Neo, the online alias of a 26-year-old graphic designer for a Bangalore fintech firm. As the crypto bear market entered its eighth month, his crypto portfolio was down 70% – money he was "comfortable with losing," he claimed. He has no plans to sell and is hoping for a resurgence in the future years.

Like Neo, most HODLer portfolios are underwater, yet many are refusing to bail.

Some 55% of U.S.-based crypto retail investors held their investments in response to the recent selloff, while around 16% of investors globally increased their crypto exposure in June, according to a survey of retail investors by eToro.

"Crypto is an asset class disproportionately held by younger investors who are more risk tolerant since they have, say, 30 more years to earn it all back," said Ben Laidler, eToro's global markets strategist.