Bitcoin Shrimps: Smart Accumulators in the Current Bear Market Cycle

In the world of cryptocurrency, the term “shrimps” refers to investors who hold less than 1 BTC in their wallets. A valuable metric to gauge the behavior of these retail holders is the “shrimp net position change,” which tracks the monthly fluctuations in the combined supply of this particular group.

As illustrated in the chart, Bitcoin shrimps have exhibited a consistent trend of expanding their holdings over the past several years, as indicated by the consistently positive monthly net position change during this period. Bitcoin Bitcoin Bitcoin

However, it’s worth noting a significant difference in the accumulation patterns of these holders during the current cycle compared to the previous one. A closer look at the chart reveals that the highest spike in the shrimp net position change during the previous cycle coincided with the peak of the bull market. This suggests that retail investors joined the crypto frenzy rather late, once they witnessed the mounting excitement in the market.

In contrast, the current cycle tells a different story. There were no sharp spikes in shrimp net position change at the peaks of the 2021 bull run. Instead, the surge in shrimp net position change occurred notably during the 3AC and FTX crashes in the 2022 bear market.

Bitcoin Shrimps: Smart Accumulators in the Current Bear Market Cycle

What’s particularly remarkable about this accumulation phase is that it surpassed the monthly amount of Bitcoin minted by miners. This implies that Bitcoin shrimps weren’t merely absorbing newly minted coins but actively acquiring them from larger entities.

Beyond these two spikes, shrimps continued to accumulate substantial amounts throughout the bear market lows and the subsequent 2023 rally. Presently, this group collectively holds approximately 1.35 million BTC, equivalent to about 6.9% of the total circulating supply of the cryptocurrency.

This shift in behavior during the current cycle, characterized by buying during market lows rather than at its peaks, indicates that these small investors are not only paying attention but also evolving their investment strategies in the crypto space.

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