The market liquidity is tightening in the Bitcoin market, as there are less than 4 million BTCs in circulation available for upcoming investors including the likes of Paypal, Square, hedge funds, and so on.
According to Yann & Jan:
“Float in the network is drying up faster than ever.
“Currently, about 78% of issued bitcoin’s are either lost or being hodled, leaving less than 4 million bitcoins to be shared amongst future market entrants (incl. Paypal, Square, SP500 Companies, ETF’s, etc).”
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Float in the network is drying up faster than ever.
Currently about 78% of issued $bitcoin’s are either lost or being hodled, leaving less than 4M bitcoins to be shared amongst future market entrants (incl. Paypal, Square, SP500 Companies, ETF’s, etc). pic.twitter.com/hCtEqQOEEl
— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) February 5, 2021
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The data from Glassnode explained the rationale for such difficulty in purchasing the most popular crypto asset.
“It is estimated that only 4.2M BTC or 22% of the total supply of BTC is in constant circulation and available for buying and selling. In other words, 78% of the circulating supply of BTC is considered illiquid.”
At press time, Bitcoin traded at $38,371.01 with a daily trading volume of $63.1 billion and is down 0.62% for the day.
READ: Bitcoin robbers transfer stolen BTCs worth $13.2 million
What you need to know
Only 21 million BTCs are ever going to be produced in total, and presently, there are about 18.9 million BTCs in circulation.
- This shows a differential of about 2.1 million BTCs that are left to be produced, not forgetting about 4.5 million Bitcoins that have already been lost forever.
- This also means that liquidity is drying up, as demand for the world’s most popular crypto hits record highs.
READ: Bitcoin: The good, the bad, the future
Glassnode also revealed that a million Bitcoins (BTC) or almost $30 billion in actual prices, disappeared from the liquid supply in 2020. This process even outperformed the inflow of new Bitcoins (BTC) into the network:
“Currently, we are at a stage in which the illiquid supply is growing more than the total circulating supply according to the report. A similar pattern presently played out again during the bullish rally of 2017.”