Ron Paul Survey Reveals Most Prefer Bitcoin For 10-Year Investment (#GotBitcoin?)
Almost 60% of 70,000 people would take Bitcoin (BTC) over fiat currency as a long-term investment. Ron Paul Survey Reveals Most Prefer Bitcoin For 10-Year Investment (#GotBitcoin?)
That was according to a new survey on Nov. 4 by Ron Paul, the ex-Texas Congressman who has become well known for his proactive position on cryptocurrency.
Ron Paul Survey: 58% Choose BTC
Part of a regular series of polls, Paul asked Twitter users about their investment preferences for $10,000 of value, delivered as a lump sum and untouchable for ten years.
So far, out of more than 67,000 responses, Bitcoin is easily the most popular choice, with 58% of the vote.
Second in line is gold on 33%, while fiat currency in the form of US dollar notes is trailing on just 2%.
The results are even more complimentary for Bitcoin than Paul’s 2018 survey, during which it finished on 49% after 59,000 votes.
Bitcoin Remains On Mainstream Radar
Paul’s advocacy likewise shows no signs of slowing as Bitcoin passes its eleventh birthday. As Cointelegraph reported, he received his first physical Bitcoin wallet last week courtesy of Bobby Lee, the ex-CEO of cryptocurrency exchange BTCC.
The survey underscores the continued interest in alternative forms of money as global geopolitical uncertainty takes its toll on a number of countries’ national currencies.
With new interest come new questions about user protection. This week, investor Trace Mayer took the message to mainstream audiences once again by announcing the second annual Proof of Keys event.
Centered on making HODLers take funds off third-party exchanges, Proof of Keys aims to educate cryptocurrency users about the responsibilities involved in using money that does not depend on a central bank.
The ‘Bitcoin Rich List’ Has Grown 30% in the Last Year, But Why?
The Bitcoin Rich List, or the number of addresses holding more than 1,000 BTC, has grown in the past 12 months, possibly reflecting an influx of high-net-worth investors.
The metric has registered growth of 30 percent since September 2018, according to Coin Metrics data. Even when adjusted to exclude addresses known to belong to exchanges, the figure shows a similar surge.
At press time, 2,148 addresses contain more than 1,000 bitcoins, amounting to just 0.01 percent of all bitcoin addresses, as per BitInfoCharts’ Bitcoin Rich List.
As seen in the fever line chart above, the list has witnessed a near 90-degree rise over the last 12 months. Investor and analyst Willy Woo believes the list has expanded mainly due to increased investor participation in the market:
“The two options are we have high-net-worth investors coming in or it could be cold storage practice at the exchanges and custody solutions. The latter explanation cannot be ruled out, but it does not coincide with other data we have on the timing of when supply increased at these entities. For now, I’m going with the first explanation.”
Note that BTC fell from $6,400 to $3,100 in the final quarter of 2018 and experienced investors may have taken advantage of the price dip to snap up the top cryptocurrency on the cheap, leading to the rise in the addresses with more than 1,000 bitcoins.
Other observers, however, are not convinced that the number of individuals with 1,000+ BTCs has increased.
After all, an individual can move 50,000 bitcoins from a single wallet to 50 different wallets for custody purposes. Also, a cryptocurrency exchange like Binance holds bitcoins belonging to millions of users and can store coins in different wallets.
“It’s mostly the exchanges … both the amount of BTC held in exchanges and the number of exchanges/custodians have been growing,” trader Alex Kruger told CoinDesk.
He noted that on-chain transaction volume in BTC terms has been relatively flat since September 2018 – a sign the rich list is possibly increasing due to exchanges, which tend to have low on-chain transaction frequency. For instance, top addresses have fewer withdrawals compared to deposits and could, therefore, be exchanges’ cold, or offline wallets.
While trading volume is the lifeblood of exchanges, it is not necessarily reflected on-chain, since these companies may internally debit or credit client addresses without executing a transaction on the public ledger.
That said, it is not possible to know for sure whether a given address with infrequent transactions is an exchange or a whale.
Further, as shown in the chart below, if you take out known exchange addresses, the rich list still grew by almost 30 percent over the 12-month period, to more than 2,100 addresses, pretty much the same rate as for all addresses.
This supports Woo’s interpretation that the influx of high-net-worth individuals was a primary reason for the rise in addresses with more than 1,000 bitcoins.
One more possible reason for the rise could be the distribution of ownership over time, according to Qiao Wang, director of product at crypto data source Messari.
“In the beginning it was Satoshi, then a few early miners, who owned all the bitcoin. But over time their share decreased and other people entered the market,” Wang said.
Looking forward, both wealthy investors and exchanges may continue to drive the rise in the number of “rich” addresses. With the next mining reward halving – a historically price-bullish event – due in six months, new investors may enter the market.
Also, trading volumes at the Bakkt bitcoin futures exchange, which needs to store bitcoin for its physically delivered futures, are increasing. Recently, futures volume jumped by more than 250 percent to $11 million. The exchange, a subsidiary of Intercontinental Exchange, is set to launch options on futures on Dec. 8.
If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t
About 9.1 million bitcoins, representing about 51% of those outstanding, haven’t changed hands in at least six months.
On Dec. 17, 2017, bitcoin hit its highest level ever—$19,783. It was a stunning move for an asset that traded under $1,000 at the beginning of the year. The manic rally enticed everyone from high-tech disciples to grandparents.
It didn’t last long. And it hasn’t returned.
In the last week of November, with bitcoin trading at around $7,000, only about 14% of the 18 million bitcoins outstanding were actively traded, according to data from research firm Flipside Crypto. That is down from more than 50% in October 2018.
The energy that drove bitcoin and the cryptocurrency industry through much of the early years has been replaced by the sobering reality that creating new global monetary standards requires more than computer code.
“Nothing has hit escape velocity,” said Ryan Selkis, the founder of research firm Messari. Although bitcoin’s supporters are still optimistic, progress in the industry as a whole is “still largely invisible, at least from a narrative standpoint,” he said.
The market has been seeking bitcoin’s next big catalyst for two years. Initial coin offerings came and went. Investors then turned their focus to bitcoin exchange-traded funds, “decentralized apps” and “decentralized finance.”
Now, hopes rest with institutional investors, and there have been signs of progress on this front. Intercontinental Exchange Inc. launched its futures exchange, Bakkt, earlier this year with the ultimate goal of making cryptocurrencies sufficiently transparent and regulated for individuals to use in retail purchases.
Meanwhile, crypto exchange Coinbase has been seeing between $200 million and $400 million in deposits a week, Chief Executive Brian Armstrong said on Twitter in August.
Yet, the number of daily bitcoin transactions has been falling lately. Since the beginning of November, it has hovered around 307,000 transactions, according to data from Blockchain.com. That is down from 370,000 in the spring.
Bitcoin’s price has recovered from its December 2018 low of about $3,100. But as evidenced by the drop in active trading, it is driven by fewer investors.
About 9.1 million bitcoins, representing about 51% of those outstanding, haven’t changed hands in at least six months, according to Flipside. About two million of those bitcoin haven’t moved in more than two years.
On one level, that number isn’t surprising. A big theme in bitcoin circles is “hodl,” a misspelling of “hold.” Some proponents of bitcoin say they believe that the cryptocurrency is destined to rise, some day, and refuse to sell. Even in December 2017, during the bubble, the percentage of bitcoins that hadn’t traded in more than six months was about 40%.
Something that hasn’t changed between then and now: virtually all of the bitcoin outstanding is held by a relatively small number of people.
Currently, only about 8.5% of all bitcoin wallets—the online accounts used to store bitcoin—hold 99% of all the bitcoin in circulation. That is little changed from 6% in mid-2017.
There are about 44 million wallets online, according to data from Blockchain.com, meaning roughly 3.7 million wallets contain 99% of all bitcoin. The number of actual users is likely lower, since one person or entity can control more than one wallet.
It isn’t exactly clear how many of those wallets belong to exchanges, but that doesn’t change the bottom line that the vast majority of bitcoin is controlled by relatively few players.
“A lot of people are sitting at the moment,” said Eric Stone, the head of data science at Flipside. But that much bitcoin sitting idle is like kindling, he suggested. “It can be the precursor to dramatic shifts.”
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