With institutional investors hoarding, there’s 22% of BTC left for the traders according to a new report that shows 78% of BTC is out of circulation, but this is not a bad thing. In today’s BTC news, we read more about it.
Most BTC is not in circulation according to a new report and this is because it is being bought up by entities that are not willing to sell. This could help to push the price of the asset up and it is driving the current bull run, according to the reports. Bitcoin “liquidity” refers to how much of the asset is in circulation and according to the findings published yesterday by Glassnode which shows that 4.2 million in BTC are available to buy and sell. The report says that there’s a shortage of BTC because of institutional investors hoarding and this trend makes the cryptocurrency more expensive:
“If many bitcoins are illiquid, a supply-side crisis emerges—which has a weakening effect on BTC’s selling pressure in the market. Or put differently: A sustained rise of illiquid bitcoins is an indication of strong investor hodling sentiment and a potentially bullish signal.”
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.
Full report: https://t.co/nohmLNNJ7U
Highlights below 👇
— glassnode (@glassnode) December 29, 2020
The reports show that the long term investors are holding the cryptocurrency and remove it from circulation as 2020 was the year of bigger companies entering the crypto space, especially with Microstrategy intelligence firm that purchased a huge chunk of BTC as a long-term investment. These companies are not likely to sell according to Glassnode and this caused a huge bull market as more than 1 million BTC became illiquid. Pedro Febrero an analyst at Quantum Economics said:
“Essentially, when the supply of bitcoin is suppressed, price has a tendency to rise, given that demand either stays equal or increases. And we know for sure that demand is indeed increasing. If only 22% of all Bitcoin are in circulation, and wealthy individuals keep acquiring Bitcoin, there is no telling how high the price may go.”
A shortage of crypto is not necessarily a bad thing since it will never disappear. The reports added that BTC liquidity and the price of the currency go hand in hand and if things go this way as they were, the price will continue rising.
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]