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Bitcoin’s Illiquid Supply Hits Record High, Implications for Price Dynamics
Explore how Bitcoin’s record high illiquid supply impacts price dynamics. Understand the implications for investors and the market as scarcity increases, potentially influencing future price movements and strategies.
Bitcoin’s Illiquid Supply Reaches Record Levels
Recent data reveals that nearly three-quarters of all bitcoin mined is now classified as illiquid, marking a historic high that indicates a growing scarcity of the cryptocurrency in the marketplace. This trend could have significant implications for Bitcoin’s price dynamics.
According to data compiled by ETC Group in conjunction with Glassnode, illiquid entities currently hold approximately 14.61 million BTC, valued at over $826 billion at current market prices. This figure represents about 74% of Bitcoin’s total circulating supply, which stands at 19.75 million BTC.
“Bitcoin’s illiquid supply has surged to an unprecedented level, now accounting for nearly 74% of the circulating supply, based on insights from Glassnode,” stated André Dragosch, head of research at ETC Group, in a report shared with CoinDesk. “This trend suggests that the supply shock induced by the upcoming Halving is intensifying, which could create a favorable environment for Bitcoin and other crypto assets in the months ahead.”
Glassnode determines the classification of illiquid entities by analyzing the ratio of cumulative outflows and inflows throughout the lifespan of the entity. This methodology provides a clear picture of how much Bitcoin is not readily available for trading.
An increase in Bitcoin’s scarcity can lead to significant market effects; as demand rises, the impact on the cryptocurrency’s price could be particularly pronounced. As of the latest update, Bitcoin is trading at $56,600. The recent bull run appears to have halted after reaching all-time highs exceeding $70,000 in the first quarter of the year.