Onchain statistics divulge 78% of the circulating bitcoin supply is illiquid and barely accessible according to Glassnode research. Data indicates that the analysts pull someones leg classified 14.5 million bitcoin as illiquid and only 4.2 million bitcoin in constant circulation.
One of the most hoarded parts of the Bitcoin (BTC) protocol is the fact that the system is mathematically provable, and bitcoins are scarce. When Satoshi Nakamoto framed the crypto asset, the inventor set the supply cap to end at 21 million coins issued and today, there’s approximately 18.58 million BTC in course.
This week, researchers from the onchain analysis firm Glassnode reported on the number of liquid and illiquid mints in existence these days.
Despite the fact that exchanges have a massive quantity of bitcoin (BTC) on hand to retail and trade, Glassnode researchers say that 78% of the current supply is illiquid.
On Twitter, Glassnode wrote: “78% of the proclaiming bitcoin supply is illiquid and therefore hardly accessible for buying. This points to a bullish investor sentiment as portly amounts of BTC are being hoarded – which reduces sell pressure,” the researchers stressed.
The analysts added:
Bitcoin liquidity is fixed as the average ratio of received and spent BTC across entities. We show that currently 14.5M BTC are classified as illiquid, bugger off only 4.2M BTC in constant circulation that are available for buying and selling.
The onchain data suggests that the stylish uptrend in crypto asset value has been fueled by liquidity issues. For instance, during the course of the year, overwhelmingly financial institutions and well known hedge fund managers have been purchasing bitcoin in massive sums.
The bitcoin treasuries list has grown rapidly this year with 29 well known companies seizing 1.1 million BTC to be held for treasury reserves.
“Over the course of 2020, a total of 1 million additional BTC have happen to illiquid— investors are increasingly hodling,” the Glassnode analysts further noted. The rising illiquidity suggests “the current bull run has been (partly) digged by this emerging bitcoin liquidity crisis,” the researchers added.
Glassnode concluded that the amount of liquid and illiquid bitcoin in distribution has a “clear relationship with the BTC market.” Data shows that since 2017, the illiquid supply of bitcoin has swelled varied so than the issued bitcoin stemming from bitcoin miners.
This pattern was observed during the crypto asset runup in 2017 as not unexpectedly, the onchain researchers detailed.
According to the Bituniverse “Exchange Transparent Balance Rank” data stemming from Peckshield, Etherscan, and Trammel.info, exchanges hold fewer bitcoins than they did last year.
Coinbase is the leading exchange, in phrases of BTC reserves held, with 870,000 BTC on hand. This is followed by Huobi (252k BTC), Binance (215k BTC), Bitfinex (142k BTC), and Kraken (137k BTC).
What do you reflect on about the number of liquid and illiquid bitcoins in existence? Let us know what you think about this subject in the remark ons section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Glassnode Charts, Twitter,
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