Against the backdrop of rising bitcoin prices, investors continued to move cryptocurrencies to long-term vaults. Over the past month, 270,000 BTC were withdrawn from liquid wallets. This is evidenced by data from the analytical company Glassnode.
Experts have noticed that Bitcoin’s liquid supply has been steadily declining over the past nine months. At the time of writing, the figure is 21.3% of the total number of coins in circulation. 78.7% of the 18.6 million issued BTC is in “illiquid” wallets.
This $ BTC chart might be more important than the price chart: bitcoin supply is being withdrawn from exchanges at an all-time-high pace.
Historically, bull cycles have ended AFTER liquid supply change flips positive (🟡)
That flip has not happened yet.
h / t @glassnode pic.twitter.com/NYWzlCdHAY
– Luke Martin (@VentureCoinist) January 20, 2021
“This bitcoin chart is more important than the price chart. Cryptocurrency is being withdrawn from exchanges at a record pace. Historically, bullish cycles ended with increased liquidity. But this has not happened yet, ”wrote analyst Luc Martin.
Glassnode recognizes a bitcoin wallet as illiquid if less than 25% of its assets have been withdrawn from it during its existence. Accordingly, wallets are considered highly liquid if they have retained less than 25% of the received coins.
Dynamics of liquid and illiquid Bitcoin supply. Data: Glassnode.
Glassnode statistics show that 61% (2.38 million BTC) of 3.9 million highly liquid BTC are on centralized exchanges. The indicator has been steadily declining – according to CryptoQuant, exchange balances have declined 13.8% since July.
There is also growing interest in the first cryptocurrency from the institutional side. According to Bitcoin Treasuries, whales now own more than 1.2 million BTC – 6.5% of all issued bitcoins.
Last year, institutional investors purchased over 1 million BTC. Among them are Grayscale Investments (600,000 BTC), MicroStrategy (70,470 BTC), Ruffer Investments (45,000 BTC) and Square (4,709 BTC).
As a reminder, Ruffer Investments’ review states that Bitcoin is in the early stages of institutional adoption.
Earlier, analysts from JPMorgan said that institutions began to perceive bitcoin as an alternative to gold.
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