Bitcoin shrimp ramp up accumulation, signaling shift in market structure

In the cryptocurrency market, Bitcoin shrimp are showing an increased interest in accumulation, suggesting a potential change in market dynamics. This shift in demand could lead to a new market structure. Explore the reasons behind this behavior and its potential impact on the Bitcoin market in this informative article. Stay updated with the latest trends in cryptocurrency investing and trading.

Democratization of Bitcoin Holders: The Rise of the Shrimps

Throughout Bitcoin’s history, market stabilizers have been the long-term holders and those with substantial BTC balances. They have played a crucial role in accumulating during downturns and distributing when the market peaks. Their actions, driven by experience and unwavering conviction in Bitcoin’s potential, have been a consistent feature in the market.

However, a shift in the Bitcoin market dynamics has been observed over the past couple of years. Since the collapse of FTX, a new player has emerged on the scene with an increased appetite for accumulation: the Bitcoin shrimp. In this context, the term “shrimp” refers to addresses with balances of less than 1 BTC.

A Surge in Shrimp Accumulation

The collapse of FTX marked a significant milestone for these shrimp holders. Within a month after the exchange’s crash, they added a staggering 85,000 BTC to their balances. This surpassed the previous high for shrimp accumulation, which was 53,000 BTC in 30 days recorded in July 2022.

bitcoin shrimp accumulation balance
Graph showing the 30-day net position change in shrimp balances from January 2022 to September 2023 (Source: Glassnode)

Between June and August, as Bitcoin’s price oscillated around $29,000, the shrimp continued their steady accumulation. On average, they added 20,000 BTC to their balances every month. When Bitcoin’s price dropped to $25,000, the shrimp intensified their accumulation activities.

As of September 10, shrimp balances witnessed an addition of over 27,000 BTC in the preceding 30 days.

bitcoin shrimp balance
Graph showing the 30-day net position change in shrimp balances from February to September 2023 (Source: Glassnode)

The Rise of Shrimp Addresses

It’s not just the accumulation of Bitcoin that’s noteworthy; the adoption rate, as evidenced by the creation of new shrimp addresses, has also seen a notable uptick. This year, the number of addresses holding less than 1 BTC has surged. A record was set on May 25, with the creation of 1.89 million new shrimp addresses in 30 days.

shrimp accumulation address ytd
Graph showing the 30-day net position change in new shrimp addresses year-to-date (Source: Glassnode)

Even as Bitcoin’s price dipped to $25,000, the momentum of new shrimp addresses remained unchanged. Over 1 million new shrimp addresses were created in the 30-day period leading up to September 10.

shrimp address 3mo
Graph showing the 30-day net position change in new shrimp addresses from July to September 2023 (Source: Glassnode)

The Democratization of Bitcoin Holdings

The aggressive accumulation patterns and rapid adoption rate of the shrimp holders signal a democratization of Bitcoin holdings. The market’s influence is no longer solely controlled by a few large holders. With a collective balance of 1.35 million BTC, the shrimp are becoming a force to reckon with.

This shift towards increased participation and decentralization of the Bitcoin network could potentially change the market influencers from major holders to smaller investors.

Sources: CryptoSlate

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