Bitcoin’s market dynamics are showing signs of intense activity as on-chain data reveals a surge in accumulation by high-net-worth investors, commonly referred to as “sharks,” holding between 100 and 1,000 BTC.
Analyst Willy Woo has shed light on this trend, emphasizing the significant increase in bitcoin supply held by these investors over the past two months.
Woo shared a Glassnode chart, showing increased activity by Bitcoin sharks.
The data suggests that despite bitcoin trading at high prices, these investors have engaged in aggressive accumulation, surpassing any previous buying phases observed from this cohort over the past few years. Even when compared to historical streaks, the scale of this latest rise stands out.
It’s important to note that this data reflects “entities,” not individual addresses. Glassnode defines an entity as a grouping of addresses belonging to the same investor. This approach provides a more accurate representation of the market, as some investors diversify their holdings across multiple wallets.
While transactions between an investor’s addresses may not affect the wider market, they are considered buying or selling when looking solely at addresses.
Willy Woo’s Assertions Met With Skepticism
However, some in the Bitcoin community have expressed skepticism regarding the nature of this accumulation. Concerns have been raised about the suddenness and magnitude of the increase, with suggestions that it may be influenced by factors such as ETFs or custodial entities.
Renowned on-chain analyst James Check has pointed out anomalies in the data, attributing the sharp rise to factors other than organic investor demand. He stated:
“I’d say that chart would be largely measuring coins going into the smaller sized spot ETFs. It won’t include IBIT and FBTC, but many of the UTXOs in the smaller ones will fall in here. Vertical jumps like that are not normal, and usually some kind of anomaly.”
In response to these concerns, Willy Woo argued that ETF inflows alone cannot account for the significant increase in bitcoin supply held by these entities. He highlighted the need to consider other factors and stressed the importance of quantitative analysis in understanding market dynamics.
According to Woo, the influx of funds into the Bitcoin network far exceeds ETF inflows, indicating genuine demand from investors.
Despite the skepticism, Woo remains bullish on bitcoin’s outlook, emphasizing the long-term implications of accumulation by high-net-worth investors. He suggests that while price movements may not immediately reflect this accumulation, they are likely to create a supply shock, stating:
“Price will rally when the market is impatient, but for patient accumulation the price does not need to move immediately, but eventually if sufficient accumulation happens price rallies afterwards due to a supply shock. So it’s not bearish at all.”
While some view the recent accumulation by Bitcoin shark entities as a bullish sign, others remain cautious, citing anomalies and alternative explanations for the observed patterns.
