Executive Summary
After several months of relatively heavy distribution pressures, the behavior of Bitcoin holders appears to be rotating back towards HODLing and accumulation.Activity in spot markets shows that there has been a net bias towards sell-side pressure of late, and this has not yet completely subsided.Compared to ATH breaks in past cycles, there is currently a relatively large percentage of network wealth held by the Long-Term Holder cohort.Overall, on-chain conditions speak to an undertone of high conviction amongst the Bitcoin holder-base.
A Return to HODLing
As the market begins to slowly recover from the sell-off last week, there is a discernible level of uncertainty, and indecision amongst digital asset investors. Nevertheless, when analyzing the onchain response of investors to these choppy market conditions, a trend of a preference for HODLing is beginning to emerge.
Since the Bitcoin price ATH was established in March, the market faced an extensive period of supply distribution, with participation by wallets of all sizes. Over the last few weeks, this trend is showing early signs of reversing, particularly for the largest wallet sizes which are often associated with ETFs. These large wallets appear to be returning to a regime of accumulation.
The Accumulation Trend Score (ATS) metric assesses a weighted balance change across the market. This metric also suggests there is a shift back towards accumulation dominant behavior.
The aforementioned shift towards accumulation has contributed to the ATS recording its highest possible value of 1.0, suggesting significant accumulation throughout the last month.
This observation is echoed across Long-Term Holders (LTH), who heavily divested during the run up to the ATH. This cohort have now returned to a preference for HODLing, with a total volume of +374k BTC migrating into LTH status over the last 3-months.
From this, we can infer that the propensity for investors to hold onto their coins is now a larger force relative to their spending pressures.
We can also assess the 7-day change in LTH supply as a tool to assess rates of change in their aggregate balance.
We can see substantial LTH distribution, typical of macro topping formations, into the March ATH. Fewer than 1.7% of trading days have ever recording a larger distribution pressure. More recently, this metric has returned to positive territory, indicating that the LTH cohort are expressing a preference for holding onto their coins.
Despite the aggressive distribution from April to July, the spot price has continued to trade above the Active Investor Cost Basis, which represents the average acquisition price of active coins in the market.
The Active Investor’s Cost-Basis can be considered as a key threshold delineating bullish and bearish investor sentiment. Since the market managed to find support near this level speaks to a degree of underlying strength, suggesting investors are generally still anticipating positive market momentum in the short-to-medium-term.
Evaluating Bias in Spot Markets
With the market within a technical downtrend, we can employ the CVD metric to estimate the present net balance between market buying and selling pressure in spot markets.
This metric can in turn be used to assess mid-term market momentum, as well as any headwinds or tailwinds for price. Since the formation of a new ATH, we note there has been a consistent regime of net sell-side pressure.
Positive CVD values suggest a net buy-side pressure, where as negative values infer a net sell-side pressure.
When we analyze the yearly median value of Spot CVD, we can see that the median value has fluctuated between -$22m and -$50m over the last 2 years, suggesting the presence of a net-sell side bias.
If we consider this long-standing median as a baseline for CVD equilibrium, we can produce an adjusted variant of the metric, accounting and correcting for this implicit sell-side bias.
When comparing the Adjusted Spot CVD (30d SMA) against the Monthly Percentage Price Change, an intriguing confluence can be found.
Under this framework, the recent failure to break above the $70k zone can be partially explained by weakness in spot demand (negative adj-CVD). Alternatively, a potential recovery of demand in the spot market can be confirmed when the Adj-CVD metric returns to positive values.
Cycle Navigation
Choppy sideways price action in recent months has motivated a notable slow-down in the distribution pressure by LTHs. This has led to the percentage of network wealth held by this cohort to firstly stabilize, and then recommence growing.
Despite the substantial sell-side pressure by LTHs into the market ATH, wealth held by longer-term investors remains historically elevated when compared to previous all time high breakouts.
This indicates that there is a potential for further divestment pressure by LTHs should the BTC price appreciate in the future. It also suggests that even though prices have traded sideways, to downwards of late, these investors are increasingly unwilling to part ways with their coins at lower prices.
Both of these observations speak to a more patient and resilient holder-base, despite choppy market conditions.
Finally, we can bolster this assessment using the LTH Sell-Side Risk Ratio. This tool gauges the absolute sum of realised profit and loss locked in by investors, relative to the size of the asset (the Realized Cap). We can consider this metric under the following framework:
High values indicate that investors are spending coins at a large profit or loss relative to their cost basis. This condition indicates that the market likely needs to re-find equilibrium, and usually follows a high volatility price move.Low values indicate that the majority of coins are being spent relatively close to their break even cost basis, suggesting a degree of equilibrium has been reached. This condition often signifies an exhaustion of ‘profit and loss’ within the current price range, and usually describes a low volatility environment.
The LTH Sell-Side Risk ratio remains at a lower level compared to prior ATH breaks. This implies that the magnitude of profit taken by the LTH cohort is comparatively small relative to previous market cycles. This also infers that this cohort is waiting for higher prices before ramping up their distribution pressure.
Summary and Conclusions
Despite challenging and choppy market conditions, Long-Term Bitcoin Holders remain remarkably steadfast in their conviction, with evidence they are ramping up accumulation behaviour.
An elevated percentage of Bitcoin network wealth is held by this investor cohort relative to previous cycle ATH breaks, which suggests there is a degree of investor patience on display, and waiting for higher prices. Additionally, the lack of panic selling amongst this cohort in lieu of the largest price contraction of the cycle highlights a resilience of their aggregate conviction.
Disclaimer: This report does not provide any investment advice. All data is provided for information and educational purposes only. No investment decision shall be based on the information provided here and you are solely responsible for your own investment decisions.
Exchange balances presented are derived from Glassnode’s comprehensive database of address labels, which are amassed through both officially published exchange information and proprietary clustering algorithms. While we strive to ensure the utmost accuracy in representing exchange balances, it is important to note that these figures might not always encapsulate the entirety of an exchange’s reserves, particularly when exchanges refrain from disclosing their official addresses. We urge users to exercise caution and discretion when utilizing these metrics. Glassnode shall not be held responsible for any discrepancies or potential inaccuracies. Please read our Transparency Notice when using exchange data.
Join our Telegram channelFor on-chain metrics, dashboards, and alerts, visit Glassnode StudioFor automated alerts on core on-chain metrics and activity on exchanges, visit our Glassnode Alerts Twitter With the market currently digesting the largest downtrend of the cycle, indecision amongst digital asset investors remains apparent. However, below the surface, a distinct return to HODLing and accumulation appears to be underway.
Amazon.com: Its Role in the U.S. Industry
Introduction
Amazon.com, often simply referred to as Amazon, has transformed from an online bookstore into a colossal global conglomerate that has fundamentally altered the landscape of retail, technology, and numerous other industries. Founded in 1994 by Jeff Bezos, Amazon’s rapid growth and diversification have made it a central player in the U.S. economy. Its impact is felt across various sectors, including e-commerce, logistics, cloud computing, entertainment, and even artificial intelligence. This article explores Amazon’s role in the U.S. industry, examining its influence, achievements, and the challenges it faces.
The Rise of Amazon.com
Origins and Early Growth
Amazon began as an online bookstore in Bezos’s garage in Bellevue, Washington. The vision was simple but revolutionary: to create an online platform where people could buy books. Bezos recognized the potential of the internet to disrupt traditional retail and chose books as his starting point due to their wide appeal and ease of distribution. By offering a vast selection and competitive prices, Amazon quickly gained a foothold in the market.
The company’s initial public offering (IPO) in 1997 marked the beginning of its journey toward becoming a dominant player in the U.S. and global markets. Amazon’s early success was driven by its focus on customer satisfaction, an extensive inventory, and a commitment to fast and reliable delivery. This focus laid the foundation for its expansion into other product categories and services.
Diversification and Expansion
Amazon’s diversification strategy began with the introduction of new product categories, such as electronics, toys, and apparel. This move positioned Amazon as a one-stop shop for consumers, significantly expanding its customer base. The company also introduced its marketplace platform, allowing third-party sellers to offer their products alongside Amazon’s own inventory. This not only increased the variety of products available but also created a new revenue stream for the company through commissions on sales.
One of the most significant milestones in Amazon’s diversification was the launch of Amazon Web Services (AWS) in 2006. AWS provided cloud computing services to businesses, enabling them to rent computing power and storage rather than investing in expensive infrastructure. This service quickly became a cornerstone of Amazon’s business, contributing significantly to its profitability and establishing Amazon as a leader in the tech industry.
Amazon’s Role in E-Commerce
Transforming Retail
Amazon’s impact on the retail industry cannot be overstated. It has revolutionized the way consumers shop, shifting much of retail activity from brick-and-mortar stores to online platforms. The convenience of shopping from home, coupled with Amazon’s vast selection and competitive pricing, has led to a fundamental change in consumer behavior. This shift has forced traditional retailers to adapt, leading to the rise of omnichannel strategies that integrate online and offline sales.
The concept of “one-click shopping,” patented by Amazon in 1999, further streamlined the online shopping experience. This innovation reduced the friction in the purchasing process, contributing to higher conversion rates and reinforcing Amazon’s dominance in e-commerce. Additionally, Amazon Prime, launched in 2005, offered customers free two-day shipping and other benefits for an annual fee, further solidifying customer loyalty and increasing the frequency of purchases.
Impact on Small Businesses
While Amazon has provided opportunities for small businesses through its marketplace platform, it has also posed challenges. On the one hand, small businesses gain access to a vast customer base and the logistics infrastructure that Amazon offers. On the other hand, they face intense competition, not only from other third-party sellers but also from Amazon itself. The company’s ability to undercut prices and its control over the marketplace platform have led to concerns about fairness and market power.
Moreover, Amazon’s algorithms and data-driven approach to retail have raised questions about the transparency of how products are promoted and priced on the platform. Small businesses often struggle to achieve visibility without spending on Amazon’s advertising services, which can be costly. Despite these challenges, many small businesses continue to rely on Amazon as a vital sales channel, underscoring its central role in the U.S. retail industry.
Amazon in the Logistics and Supply Chain Industry
Revolutionizing Logistics
Amazon’s impact extends beyond retail into logistics and supply chain management. To fulfill its promise of fast and reliable delivery, Amazon has invested heavily in building a sophisticated logistics network. This network includes a vast network of fulfillment centers, advanced robotics, and a growing fleet of delivery vehicles, including drones.
Amazon’s logistics capabilities have set new standards for the industry. The company has pushed the boundaries of what is possible in terms of speed and efficiency, challenging traditional logistics providers like FedEx and UPS. Amazon’s commitment to customer satisfaction has driven innovations such as same-day and even one-hour delivery in select areas, further raising consumer expectations.
In-House Logistics Services
In recent years, Amazon has taken steps to reduce its reliance on third-party logistics providers by expanding its in-house delivery capabilities. The launch of Amazon Logistics, a service that uses independent contractors to deliver packages, is a testament to this strategy. This move has enabled Amazon to exert greater control over the delivery process and reduce costs.
However, this expansion has not been without controversy. Amazon’s use of independent contractors has sparked debates about labor practices and the gig economy. Critics argue that Amazon’s business model places financial and physical burdens on its delivery drivers, who are often classified as independent contractors rather than employees. This classification exempts Amazon from providing benefits and protections typically afforded to employees, such as health insurance and minimum wage guarantees.
Amazon Web Services: The Backbone of the Internet
Dominating Cloud Computing
Amazon Web Services (AWS) has emerged as one of the most significant contributors to Amazon’s success. As the leading provider of cloud computing services, AWS powers a vast portion of the internet, supporting everything from startups to large enterprises. Its services include computing power, storage, databases, machine learning, and more.
AWS’s dominance in cloud computing has had a profound impact on the tech industry. By providing scalable and cost-effective solutions, AWS has lowered the barriers to entry for new businesses, fostering innovation and entrepreneurship. Companies no longer need to invest heavily in physical infrastructure; instead, they can rent the necessary resources on demand from AWS.
Economic Impact and Innovation
The success of AWS has not only boosted Amazon’s financial performance but also contributed to the broader U.S. economy. AWS has created jobs, driven innovation, and supported the growth of numerous tech companies. Its services have become integral to the operations of many businesses, from streaming services like Netflix to financial institutions and government agencies.
AWS’s role in advancing technologies such as artificial intelligence and machine learning has also been significant. By making these technologies accessible through cloud services, AWS has enabled companies to develop new applications and services that were previously out of reach. This has spurred growth in sectors such as healthcare, finance, and entertainment.
Amazon’s Influence on Entertainment and Media
Amazon Studios and Prime Video
Amazon’s foray into the entertainment industry began with the launch of Amazon Studios and Prime Video. These platforms have become key players in the streaming wars, competing with giants like Netflix, Disney+, and HBO Max. Amazon Studios produces original content, including critically acclaimed series like The Marvelous Mrs. Maisel and The Boys, as well as feature films.
Prime Video, available as part of the Amazon Prime membership, has become a major driver of subscriber growth. By offering a mix of original content and licensed programming, Amazon has been able to attract a diverse audience. The company’s investment in high-quality content has not only boosted its streaming service but also positioned it as a significant player in Hollywood.
Impact on the Publishing Industry
Amazon’s origins as an online bookstore continue to influence the publishing industry. The company has become the largest bookseller in the world, both in physical books and e-books. The Kindle, Amazon’s e-reader, revolutionized the way people consume books, making digital reading mainstream.
However, Amazon’s dominance in the book market has raised concerns among publishers and authors. The company’s pricing strategies and negotiation tactics have led to disputes over revenue sharing and control. Amazon’s influence over the publishing industry extends to self-publishing, where its Kindle Direct Publishing platform allows authors to bypass traditional publishers and reach readers directly. While this has democratized publishing, it has also led to an oversaturation of the market and challenges in quality control.
Challenges and Criticisms
Regulatory Scrutiny
Amazon’s immense size and influence have made it a target for regulatory scrutiny. In the U.S. and abroad, lawmakers and regulators have raised concerns about the company’s market power, labor practices, and treatment of third-party sellers. Antitrust investigations have been launched to determine whether Amazon engages in anti-competitive behavior, such as favoring its own products over those of third-party sellers on its platform.
The company’s expansion into various industries has also led to concerns about its dominance and potential to stifle competition. Critics argue that Amazon’s control over data, logistics, and retail gives it an unfair advantage, making it difficult for smaller companies to compete. In response, there have been calls for greater regulation and even the potential breakup of Amazon into smaller entities.
Labor Practices and Workers’ Rights
Amazon’s labor practices have come under intense scrutiny, particularly in its fulfillment centers and delivery network. Reports of grueling working conditions, high injury rates, and inadequate breaks have sparked widespread criticism. Workers have organized protests and strikes, demanding better pay, safer working conditions, and the right to unionize.
The company’s use of technology to monitor and manage workers has also raised ethical concerns. Amazon’s reliance on algorithms to track productivity and enforce performance targets has been criticized for creating a dehumanizing work environment. The company’s resistance to unionization efforts has further fueled debates about workers’ rights and corporate responsibility.
Environmental Impact
As one of the largest companies in the world, Amazon’s environmental impact is significant. The company’s vast logistics network and rapid delivery services contribute to carbon emissions and packaging waste. Amazon has faced criticism for its role in driving consumerism and its contribution to environmental degradation.
In response, Amazon has pledged to become more sustainable. The company launched the Climate Pledge in 2019, committing to reach net-zero carbon emissions by 2040. Amazon has also invested in renewable energy, electric delivery vehicles, and sustainable packaging. While these efforts are a step in the right direction, critics argue that more needs to be done to address the environmental impact of the company’s operations.
