Bitcoin’s future is a topic of discussion that has gained relevance and steam over the year.
Certain crypto-analysts in the space remain certain that present-day investor confidence and hodling behavior in the Bitcoin market will reap benefits for the world’s largest digital asset in the long run.
Coin Days Destroyed or CDD is defined as the transacted Bitcoin volume times the number of days since the coin was last moved.
Rafael Schultze-Kraft, CTO at Glassnode tweeted, “Similarly, Bitcoin Binary Coin Days Destroyed has never been as low as in 2020.” Bitcoin’s Reserve Risk levels, at the time of writing, also suggested that the Bitcoin market had an attractive risk/reward ratio for its investors, with a low ratio indicative of higher market confidence.
Long-term hodling; just a change in the type of users? Now, before we conclude that Bitcoin users have evolved over time, we need to understand the initial functionality of the crypto-asset.
Bitcoin had a higher on-chain velocity initially, which meant that the asset was moving off-exchange, as well as being used for acquiring goods and services.
Whether Bitcoin is profitable based on these metrics in the future is yet to be seen, but it is quite possible that the current crop of Bitcoin investors does not share the same ideology as the investors of yesteryears.