What are Hodl Waves

“Hodl wave” is a term coined by Unchained Capital, a cryptocurrency based financial services lending firm, which studied Bitcoin’s Unspent Transaction Outputs (UTXO) and noticed a pattern of holding emerge every couple of years.

They were able to track the age of Bitcoins (how long since they were last spent) by tracking unspent transaction outputs on the Bitcoin’s public ledger. They identified three significant periods of owners holding on to their Bitcoins.

The first such wave was formed during the initial Bitcoin days from 2009 through 2011, when it wasn’t really worth a lot ($0 to $33) and owners mostly held on to them speculating that their value would increase in the future.

The second hodl wave came in 2011 between June and December, when the value of Bitcoin skyrocketed from $33 to $1k. After that point more than 60% of Bitcoin had been spent within the last 12 months, with earlier investors cashing-in in a major way.

The biggest hodl wave formed and broke between 2013’s rally to 1k and last year’s rally to 19k. During that period 1-year unspent Bitcoin percentage went from a high of 60% to only 40%, again with earlier investors cashing in and creating a new generation of hodlers, or “bag holders” as they are often referred to in crypto circles.

If history is anything to go by, it is only a question of time, before this latest hold wave rises to a crest and then breaks, creating a new generation of winners and … hodlers.