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Illiquid Bitcoin Is Now Record 74% of BTC's Circulating Supply. That's Bullish
According to ETC Group, the new high is a sign that the halving-induced supply shock is intensifying.
Updated Sep 5, 2024, 4:30 p.m. Published Sep 4, 2024, 11:17 a.m.
- The illiquid bitcoin has risen to a record high of 74% of the circulating supply.
- The level reflects the increasing scarcity of BTC in the market and a potential bullish impact on its price.
Almost three-quarters of bitcoin produced is considered illiquid, a record level that suggests increasing scarcity of the cryptocurrency in the market and a potential bullish impact on its price.
Data tracked by ETC Group and Glassnode shows that illiquid entities now own 14.61 million BTC, worth over $826 million at current prices, equating to 74% of the cryptocurrency's total circulating supply of 19.75 million.
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"Bitcoin's illiquid supply reached a new all-time high of almost 74% of circulating supply according to data provided by Glassnode, signaling that the Halving-induced supply shock is actually intensifying. This should provide an increasing tailwind for Bitcoin and other crypto assets over the coming months," André Dragosch, head of research at ETC Group, said in a report shared with CoinDesk.
Glassnode identifies illiquid entities based on the ratio of cumulative outflows and inflows over the entity's lifespan.
Increasing BTC scarcity in the market means a pick-up in demand could have an outsized bullish impact on the cryptocurrency's going market rate.
As of writing, BTC was changing hands at $56,600. The bull run has stalled since prices hit lifetime highs above $70,000 in the first quarter.
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
What to know:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
- Several recent institutional developments, including Vanguard's crypto ETF policy reversal and Bank of America's greenlighting of crypto allocations, have contributed to bitcoin's rebound from recent lows.
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