Onchain figures indicate that 78 percent of the bitcoin supply circulating is illiquid and hardly available according to Glassnode study. Data reveals that observers have listed 14.5 million bitcoin as illiquid and just 4.2 million bitcoin in steady circulation.
One of the most important aspects of the Bitcoin (BTC) protocol is that the method is mathematically proved and bitcoins are scarce. When Satoshi Nakamoto developed the crypto asset, the inventor set the production limit to 21 million coins issued, and today there are approximately 18.58 million BTCs in circulation.
Researchers at Glassnode’s on-chain research company posted on the amount of liquid and illiquid coins in existence these days.
Despite the fact that exchanges have a massive quantity of bitcoin (BTC) on hand to sell and trade, Glassnode researchers say that 78% of the current supply is illiquid.
On Twitter, Glassnode wrote: “78% of the circulating bitcoin supply is illiquid and therefore hardly accessible for buying. This points to a bullish investor sentiment as large amounts of BTC are being hoarded – which reduces sell pressure,” the researchers stressed.
The analysts added:
Bitcoin liquidity is defined as the average ratio of received and spent BTC across entities. We show that currently 14.5M BTC are classified as illiquid, leaving only 4.2M BTC in constant circulation that are available for buying and selling.
Onchain results show that the recent uptrend in crypto asset valuation has been fuelled by liquidity problems. For example, major financial firms and well-known hedge fund investors have been buying bitcoin in huge amounts over the course of the year.
The Bitcoin treasury list has expanded exponentially this year, with 29 well-known businesses capturing 1.1 million BTC to keep treasury deposits.
“A total of 1 million additional BTCs have become illiquid over the course of 2020, with investors increasingly hodling,” said Glassnode analysts. Rising illiquidity indicates that “the current bull run has been (partly) driven by this emerging bitcoin liquidity crisis,” the researchers added.
Glassnode concluded that the volume of liquid and illiquid bitcoin in circulation has a “clear relationship with the BTC market.” Data reveals that since 2017, the illiquid availability of bitcoin has swelled more than the bitcoin issued by bitcoin miners.
This phenomenon was observed during the crypto asset run-up in 2017, as well as thorough on-chain analysts.
According to the Bituniverse “Exchange Transparent Balance Rank” data from Peckshield, Etherscan, and Chain.info, exchanges carry less bitcoins than they did last year.
Coinbase is the largest BTC reserve exchange with 870,000 BTCs on hand. This was followed by Huobi (252k BTC), Binance (215k BTC), Bitfinex (142k BTC) and Kraken (137k BTC).
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