Executive Summary
When comparing Bitcoin’s cyclical price performance since the bear market was low, an uncanny similarity emerges over the prior three cycles, with the index trading at a nearly identical position.There has been a rise in the number of Long-term Holder coins held in loss, as large volumes of BTC acquired near the $73k ATH mature across the 155-day threshold.However, the magnitude of unrealized loss held by these investors remains small in scale, suggesting minimal financial pressure imposed on their portfolios.A clear improvement in Short-Term Holder profitability can be observed throughout the recent rally, providing relief for buyers who recently acquired their coins.The conviction of US ETF investors remains relatively robust, with only minor sell-side pressure taking place, despite being underwater on average inflow cost basis positions.
Cycle Navigation
The Bitcoin market saw a relief rally back towards the $66k region last week, setting the first technical higher high since June. This price action provides the first inclinations that the structured downtrend may be approaching a phase shift.
The market pulled back to $60k early this week and is trading at $61.7k at the time of writing.
When we assess the price performance of Bitcoin from the cycle low, a remarkable similarity in performance emerges despite wildly differing market conditions. The reason for Bitcoin following such a similar path is a regular topic of debate, but it continues to provide an interesting framework for analysts to think about cycle structure and duration.
Both the 2015-16 🔵, and 2019-20 🟢 periods have traded in an oddly similar manner to the recovery seen in 2023-24 ⚫.
Deceptive Long-Term Holder Losses
One of the most powerful tools in on-chain analysis is our ability to gauge how many coins are held in profit or loss and the magnitude of unrealized paper gains/losses for investors. We can bolster this using cohorts, with the Long and Short-Term Holder cohorts particularly instructive.
We can compare the Long/Short-Term Holder Supply Ratio to assess the balance between these cohorts. This lens shows a large volume of coins maturing into Long-Term Holder status, pushing this ratio to the highest level since mid-2021.
This suggests that HODLing persists as the dominant behaviour of Bitcoin investors.
However, we are also seeing a notable uptick in Long-Term Holder supply, held at an unrealized loss. This can be attributed to coins acquired in close proximity to the $73k ATH, which are now beginning to mature across the 155-day threshold.
Whilst unrealized losses can be interpreted as a form of financial pressure felt by investors, Long-Term Holder supply tends to remain held throughout periods of volatility.
If we break down the proportion of total supply held in the loss by long-term holders, we see a surge in their dominance, with this cohort now accounting for 47.4% of all coins in the loss.
Again, similarities to the 2013, 2019 and 2021 periods emerge when investors entered a re-accumulation phase.
Despite LTHs accounting for 47.4% of the supply held in loss, the magnitude of the unrealized ‘paper’ losses held within these coins remains relatively small.
This is a constructive observation as it suggests that while many ‘top buyers’ are technically underwater on their holdings, the scale of their portfolio drawdown is relatively small, and the financial pressure may be interpreted as minimal.
Short-Term Holder Profitability Improves
To balance the equation, we can also look toward the Short-Term Holder cohort, which represents a pool of new demand in the market and tends to be more responsive to market volatility.
The Short-Term Holder MVRV metric describes the average unrealized profit/loss held by short-term holders. Over recent weeks, this metric has experienced several successive undercuts below the equilibrium value of 1, describing an STH cohort that is, on average, holding an unrealized loss.
However, the depth and the duration below 1.0 is unlike that seen during previous bear market structures, such as in 2022. A slight positive divergence is also developing, where the price is generally flat over the last month, but STH-MVRV is increasing.
Both of these observations suggest that the positioning and profitability of new investors are improving and, similar to the LTH cohort, may not be as financially stressful as in typical bear market conditions.
The percentage of Short-Term Holder Supply held in profit tells a similar story, with over 62% of their supply now held in a profitable position. From this, two key insights can be drawn:
A significant volume of STH coins have a cost basis located between $53k and $66kA higher high in the percent of STH supply in profit has been established, again suggesting their profitability is improving and easing financial pressure on this cohort.
The recovery also places the Percent Supply in Profit near the long-term average for this metric, which is a noteworthy rebound.
The STH Realized Profit / Loss Ratio has also rebounded strongly, returning into positive territory and seeing profit-taking volumes 14.17 times larger than for loss-taking. From a structural perspective, this provides an extra layer of confluence that the market is in a superior position relative to just a few weeks ago.
Institutional Demand
The institutional appetite for regulated Bitcoin exposure has been nothing short of phenomenal. The total assets under management within the US Spot ETFs now have a market value of $58B and hold around 4.6% of the circulating Bitcoin supply.
We can also see a recent uplift in the ETF balances on Glassnode due to the inclusion of holdings within the ‘BTC’ instrument associated with the Grayscale Bitcoin Mini Trust.
With BlackRock, Fidelity and Grayscale ranking as the largest US Spot ETFs, we can consider the price-stamping of Bitcoin deposits to their ETFs as a method to estimate the average acquisition cost basis. The cost basis of these instruments ranges from $54.9k to $59.1k.
This cost-basis model can then approximate a break-even point for ETF investors as a gauge for psychological stress points based on their unrealized profit/loss. As we can see, the price has tested these ETF break-even levels in three key instances since July.
With the ETFs being a relatively new piece of the Bitcoin market structure, it is helpful to put their influence on the market into perspective and size them up against the traditional spot markets.
In this final chart, we evaluate the proportion of positive net capital flows associated with introducing ETF instruments.
Next, we compare the value invested into the ETFs 🟩 to the net capital inflow into the Bitcoin asset overall 🔴, measured as the change in the Realized Cap over the same period.
Since early January, the result shows that a non-trivial 4% to 5% of the overall net capital inflow to the Bitcoin market can be associated with coins flowing into US Spot ETFs. Given that this is aligned with their share of the total supply held, we have a reasonable baseline for evaluating their market influence.
Summary and Conclusions
The recent market rally has several initial signs that a change in market structure may be beginning to emerge, with Bitcoin printing its first technical higher high since the $73k top.
The Long-Term Holder cohort is largely in a regime of dominant HODLing and accumulation, while Short-Term Holders have seen a notable resurgence in their profitability. Across several measures, the average Bitcoin investor is in a better and more profitable position compared to just a few weeks ago and is experiencing less financial stress across the board.
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 For the first time since the ATH, Bitcoin has established a new technical higher high, as price bounced into the $66k region. Alongside this, there is a multitude of critical on-chain metrics that have also set higher highs, making this an interesting moment in time.
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.
