{"id":270486,"date":"2022-10-28T18:21:49","date_gmt":"2022-10-28T17:21:49","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=270486"},"modified":"2022-10-28T18:21:49","modified_gmt":"2022-10-28T17:21:49","slug":"terra-collapse-sparked-explosive-growth-in-long-term-bitcoin-supply","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/terra-collapse-sparked-explosive-growth-in-long-term-bitcoin-supply\/","title":{"rendered":"Terra collapse sparked explosive growth in long-term Bitcoin supply"},"content":{"rendered":"<p>The Terra collapse, in which $60 billion of value evaporated, has already gone down as a defining moment in cryptocurrency history.<\/p>\n<p>TerraForm Labs co-founder <a href=\"https:\/\/cryptoslate.com\/terra-co-founder-do-kwon-tells-laura-shin-fraud-charges-against-him-are-illegitimate\/\">Do Kwon<\/a> maintains the issue boiled down to weaknesses in the UST stablecoin protocol design. However, others have openly called out the project as a scam from the off.<\/p>\n<p>The event triggered an exodus of capital, tanking prices across the board from which the market has yet to recover.<\/p>\n<p>Nonetheless, on-chain metrics show an interesting change in the dynamics of long-term Bitcoin holders resulting from the collapse.<\/p>\n<h2>Bitcoin supply held by long-term holders soared<\/h2>\n<p>At the end of March, Bitcoin was priced at $47,000 and ticking along despite early warnings of an inflationary spike and trouble in Eastern Europe escalating further.<\/p>\n<p>Moving into May, BTC opened the month at $40,000. But, on May 7, UST began losing its dollar peg price. By May 13, the UST daily close was $0.13, having dipped as low as $0.06 on the day.<\/p>\n<p>As the crisis was unfolding, the knock-on effect saw BTC sink to $30,000 by May 11. And by mid-June, the price had fallen 62% from the end of March to $18,000.<\/p>\n<figure id=\"attachment_270524\" aria-describedby=\"caption-attachment-270524\" style=\"width: 1282px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-270524 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/price-lt.jpg\" alt=\"Bitcoin price chart\" width=\"1282\" height=\"715\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/price-lt.jpg 1282w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/price-lt-300x167.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/price-lt-1024x571.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/price-lt-768x428.jpg 768w\" sizes=\"(max-width: 1282px) 100vw, 1282px\" \/><figcaption id=\"caption-attachment-270524\" class=\"wp-caption-text\">Source: Glassnode.com<\/figcaption><\/figure>\n<p>The chart below shows the total supply held by long-term holders (LTH) &#8211; Glassnode defines LTHs as individuals with a position held longer than six months. It highlights a gradual drawdown in LTHs in early May as word of the UST de-peg spread.<\/p>\n<p>This trend bottomed by late July, leading to a continuous 45-degree takeoff in LTHs. A significant reason for this pattern relates to buying activity early on in April and May (six months ago,) which has since matured in the classification of LTHs.<\/p>\n<figure id=\"attachment_270531\" aria-describedby=\"caption-attachment-270531\" style=\"width: 1800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-270531 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-supply.png\" alt=\"Bitcoin supply by long-term holders\" width=\"1800\" height=\"1013\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-supply.png 1800w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-supply-300x169.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-supply-1024x576.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-supply-768x432.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-supply-1536x864.png 1536w\" sizes=\"(max-width: 1800px) 100vw, 1800px\" \/><figcaption id=\"caption-attachment-270531\" class=\"wp-caption-text\">Source: Glassnode.com<\/figcaption><\/figure>\n<h2>LTHs Net Position Change<\/h2>\n<p>The Bitcoin: Long-Term Holder Net Position Change refers to token distribution by LTHs, who are denoted in green as net accumulators or in red as net distributors cashing out of positions.<\/p>\n<p>As the macro landscape worsened in the second half of the year, LTHs began selling their positions. However, the trend has flipped since September, with LTHs seeing value at these prices and accumulating accordingly.<\/p>\n<figure id=\"attachment_270537\" aria-describedby=\"caption-attachment-270537\" style=\"width: 1800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-270537 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lthnpc.png\" alt=\"Bitcoin: LTHs net position change\" width=\"1800\" height=\"1013\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lthnpc.png 1800w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lthnpc-300x169.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lthnpc-1024x576.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lthnpc-768x432.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lthnpc-1536x864.png 1536w\" sizes=\"(max-width: 1800px) 100vw, 1800px\" \/><figcaption id=\"caption-attachment-270537\" class=\"wp-caption-text\">Source: Glassnode.com<\/figcaption><\/figure>\n<h2>Short-term vs. long-term holders<\/h2>\n<p>The chart below changes the definition of LTHs to held for more than one year, meaning Short-Term Holders (STHs) refer to holdings of less than a year.<\/p>\n<p>It was noted that price peaks in BTC coincided with leveling or significant drops in STH supply. The exceptions to this were during the period before and including the $900 price peak in December 2013. In these instances, no pattern in STHs could be discerned.<\/p>\n<p>Similarly, since that outlier period, market lulls were accompanied by an uptick in LTH supply, as LTHs accumulated tokens.<\/p>\n<p>Fast forward to the present, LTHs are spiking higher, while STHs are decreasing rapidly. This has created a dramatically divergent pattern not seen before to this degree.<\/p>\n<figure id=\"attachment_270538\" aria-describedby=\"caption-attachment-270538\" style=\"width: 1800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-270538 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-vs-sth.png\" alt=\"Long term vs. short term supply\" width=\"1800\" height=\"1013\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-vs-sth.png 1800w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-vs-sth-300x169.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-vs-sth-1024x576.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-vs-sth-768x432.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/lth-vs-sth-1536x864.png 1536w\" sizes=\"(max-width: 1800px) 100vw, 1800px\" \/><figcaption id=\"caption-attachment-270538\" class=\"wp-caption-text\">Source: Glassnode.com<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>The Terra collapse, in which $60 billion of value evaporated, has already gone down as a defining moment in cryptocurrency history. TerraForm Labs co-founder Do Kwon maintains the issue boiled down to weaknesses in the UST stablecoin protocol design. However, others have openly called out the project as a scam from the off. The event [&hellip;]<\/p>\n","protected":false},"author":460,"featured_media":271257,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77921],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Terra collapse sparked explosive growth in long-term Bitcoin supply<\/title>\n<meta name=\"description\" content=\"Long term Bitcoin supply has spiked significantly since the Terra implosion, suggesting buyers saw value during the collapse and since.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/terra-collapse-sparked-explosive-growth-in-long-term-bitcoin-supply\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Terra collapse sparked explosive growth in long-term Bitcoin supply\" \/>\n<meta property=\"og:description\" content=\"Long term Bitcoin supply has spiked significantly since the Terra implosion, suggesting buyers saw value during the collapse and since.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/terra-collapse-sparked-explosive-growth-in-long-term-bitcoin-supply\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2022-10-28T17:21:49+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/10\/terra-bitcoin-growth.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Samuel Wan\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Samuel Wan\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/terra-collapse-sparked-explosive-growth-in-long-term-bitcoin-supply\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/terra-collapse-sparked-explosive-growth-in-long-term-bitcoin-supply\/\"},\"author\":[{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/#person\",\"name\":\"Samuel Wan\",\"url\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/samuel-wan\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/samuel-wan-author-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/12\/samuel-wan-author-300x300.jpg\",\"caption\":\"Samuel Wan\"},\"jobTitle\":\"Analyst\",\"description\":\"Samuel Wan, a finance professional turned full-time crypto content creator, values individual autonomy and personal freedom in his pursuits.\",\"worksFor\":{\"@id\":\"https:\/\/cryptoslate.com\/#organization\"},\"sameAs\":[\"https:\/\/x.com\/WanSamuel\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/#person\",\"name\":\"James Van Straten\",\"url\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/james-van-straten\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/07\/cryptoslate-james-van-straten-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/07\/cryptoslate-james-van-straten-300x300.jpg\",\"caption\":\"James Van Straten\"},\"jobTitle\":\"Former Lead Analyst\",\"description\":\"James fervently appreciates data, technology, and trend-spotting. 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