Bitcoin Trends: Shrimps and Crabs Accumulate Amidst Market Shifts

Bitcoin Accumulation by Shrimps and Crabs

Recent market shifts have seen notable Bitcoin accumulation by smaller investors. Since the collapse of the FTX exchange, a group known as "shrimps," holding less than one BTC, has added 96,200 BTC to their portfolios. This increase brings their total holdings to over 1.21 million BTC, accounting for 6.3% of the total circulating supply.

Similarly, "crabs," investors owning one to ten BTC, have seized the opportunity to purchase Bitcoin during the price decline. Over the past month, this group has accumulated 191,600 BTC, reaching an all-time high in their holdings, surpassing records set earlier in July 2022.

Decline in Exchange Supply

There has been a significant decrease in Bitcoin supply on exchanges, now down to 6.95%. This reduction suggests a shift towards self-custody among investors, possibly driven by waning confidence in centralized exchanges. This level of exchange supply was last seen nearly four years ago, indicating a broader trend of investors moving their assets off exchanges.

Market Impact and Trends

The bankruptcy of FTX triggered a broader crypto contagion, affecting major companies and causing Bitcoin prices to plummet from over $21,000 to below $16,000. As of the latest data, Bitcoin was trading at $16,470, reflecting a slight daily decline. Despite these challenges, smaller investors continue to accumulate Bitcoin, reinforcing their long-term confidence in the cryptocurrency.

Whale Activity and Implications

Contrasting with the behavior of shrimps and crabs, Bitcoin whales—those holding more than 1,000 BTC—have been offloading some of their holdings. Over the last month, they transferred over 6,500 BTC to exchanges, indicating potential sell-off intentions. However, their overall holdings remain substantial at 6.3 million BTC, underscoring their significant market influence.

Importance of Self-Custody

The trend towards self-custody highlights a growing mistrust in centralized exchanges. With Bitcoin exchange supplies at record lows, investors are increasingly opting for personal control over their assets. This movement could reshape the landscape of cryptocurrency storage and trading in the near future.