Bitcoin Accumulation Hits Record High amid Massive Crypto Yield Collapse

Key Takeaways:

  • Bitcoin accumulation by retail investors is at all-time high.
  • Whales don't pitch in amid the crypto yield collapse.
  • Bitcoin is a commodity and not a security, unlike the DeFi sector, says Saylor.
Bitcoin accumulation spikes to ATH amid massive crypto yield collapse

YEREVAN (CoinChapter.com) – Bitcoin (BTC) has charted in a sideways consolidation since the 30% drop caused by the FTX debacle in early November and the subsequent crypto yield collapse. However, small retail investors took the price avalanche as a BUY signal and started accumulating.

Bitcoin accumulation spikes at an all-time high

According to crypto on-chain metrics platform Glassnode, shrimps, i.e., accounts holding less than one Bitcoin, have added 96,200 BTC to their holdings since FTX collapsed, an equivalent of approximately $1.6 billion at the current price.

BTC shrimp position change
BTC shrimp position change. Source: Glassnode.com

Moreover, the balance increase constituted an all-time high for Bitcoin retail investors, bringing their collective holdings to 1.2 million BTC. The ‘crab’ investors, holders of 1-10 BTC, have also seen an aggressive balance increase of 191,600 coins over the last 30 days, says Glassnode. As a result, the ‘crab’ net position approached 3 million BTC.

Bitcoin Crab investors accumulate
Bitcoin Crab investors accumulate. Source: Glassnode.com

Whales don’t hurry to BUY just yet

Notably, the Bitcoin accumulation spike by retail investors came on the back of liquidation from whales, addresses that own over 1,000 Bitcoin.

Whales have released approximately -6.5k BTC to exchanges on net over the last month. Whilst this is distribution, it remains very small relative to their total holdings of 6.3M BTC.

commented Glassnode.
Whales don't hurry to BUY just yet
BTC whale position change. Source: Glassnode.com

Meanwhile, the impressive accumulation came against the massive crypto yield collapse, which caused the price avalanche in the first place.

Also read: Bitcoin Bottom Calls Pick Momentum as BTC Price Eyes Crash to $10K.

Crypto yield collapse shakes the market.

The Terra implosion in May and the FTX debacle in early November shook the DeFi market. As a result, a contagion spread, taking down leading crypto lenders like Genesis and threatening others like Nexo.

Moreover, the lenders brought it on themselves, say experts. For example, crypto analyst Dylan LeClair called the lending platforms out for offering unrealistic yields.

If the yield is greater than the “risk-free” market rate, they are, by definition, taking a directional risk to chase said “yield.” Your yield is not yield, you’re just short crypto vol.

said LeClair.

The analyst also noted that “the leverage mania in crypto is over,” yield-generating arbitrage opportunities have collapsed. However, he called the investors to “carefully evaluate” how companies can still offer yield products above risk-free rates.

There’s an ongoing, vicious feedback loop where higher prices drive more speculation and leverage, which, in turn, drive higher yields. Now, we’re dealing with this cycle in reverse. Lower prices wipe out more speculation and leverage while washing out any “yield” opportunities.

expanded the analyst.

“As a result, yields everywhere have collapsed,” concluded LeClair, advocating for a division between Bitcoin and DeFi. The narrative resonated with another Bitcoin enthusiast under the pseudonym Gigi, who wrote an open letter to “all confused and dismissive.”

Battle of definitions -Bitcoin and DeFi are not the same thing

The letter pinned several key arguments to support the following claim: “Bitcoin and DeFi are different in principle.” The author called all other digital assets “noise,” arguing the high likelihood of losing all your funds if you “have been fooled.”

Michael Saylor, the chief executive of MicroStrategy, a business consulting firm known for its Bitcoin affiliation, argued the same point of view for years. Recently, the CEO got into another Twitter feud with avid Bitcoin opponent Peter Schiff and claimed that BTC is a commodity, not a security.

Battle of definitions -Bitcoin and DeFi are not the same thing.

While watching the two argue is entertaining, the question of which crypto initiative to trust remains dire for traders. Many retail investors have their answer, as evidenced by the spiking Bitcoin accumulation.

Click here to keep up with the ever-changing crypto market and never miss the scoop!

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