Crypto experts argue that such strong demand in the Bitcoin market is largely attributed to the fact institutions are coming.
The market liquidity is tightening at the flagship Crypto market, as there are less than 4 million BTCs in circulation available for upcoming investors including the likes of Grayscale, Paypal, Microstrategy, hedge funds, and so on.
Only 21 million Bitcoins are ever going to be produced in total, and presently, there is about 18.9 million Bitcoin in circulation.
This shows a differential of about 2.1 million Bitcoin 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
The amount of illiquid Bitcoin supply in the network has grown more than the circulating supply since 2017.
Meanwhile, liquid supply continues to see a steep decrease.
The amount of illiquid #Bitcoin supply in the network has grown more than the circulating supply since 2017.
Meanwhile, liquid supply continues to see a steep decrease.
Pair this with the demand from MSTR, Square, Tesla, Grayscale et al., and understand how bullish this is. pic.twitter.com/wiZsswqXKp
— Rafael Schultze-Kraft (@n3ocortex) February 25, 2021
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).
It’s also important to understand Institutional investors love transparency, regulation meaning the more regulated Bitcoin mechanisms such as regulating Crypto exchanges handling it, the more value major institutions will place in it, thus making Bitcoin a less volatile asset in the long term.
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.”