According to a June report published by ARK Invest, the supply of Bitcoin BTC 0.54% that has not been affected for at least a year has reached an all-time high. The report highlights that approximately 70% of Bitcoin’s circulating supply remains dormant this month.
This remarkable accumulation could be attributed to a variety of factors, such as BlackRock’s application for a Bitcoin ETF, or signs that Grayscale is gaining an advantage in its legal battle with the US SEC.
Notably, the Grayscale Bitcoin Trust (GBTC) net asset value (NAV) discount has fallen to its lowest level in a year, reflecting a favorable shift in sentiment towards Bitcoin.
Additionally, over-the-counter (OTC) bitcoin balances, which represent institutional activity, have reached yearly highs. Additionally, Tether’s supply has reached an all-time high, likely due to the reduction in USDC supply.
Bitcoin supply has continued to accumulate for at least a year, suggesting a possible shift in market dynamics. As Bitcoin continues to gain mainstream attention, investors and institutions appear to be taking a long-term approach to investing. ARK Invest’s findings suggest that people are confident about Bitcoin’s future prospects, as evidenced by an increase in the proportion of untouched supply.
The increase in dormant bitcoin supply coincides with recent developments in the regulatory environment and institutional interest in cryptocurrencies. BlackRock’s application for a bitcoin ETF has sparked anticipation and speculation among market participants, as the approval of such an ETF could provide traditional investors with easier access to bitcoin.
In addition, the ongoing legal proceedings involving Grayscale GBTC and the US SEC have also attracted considerable attention. If Grayscale’s position is strengthened, it could have a profound impact on the market and could pave the way for increased institutional participation.
Another notable aspect is the gradual reduction of Grayscale’s GBTC discount. A reduction in the discount indicates a narrowing of the gap between the market price and the trust’s net asset value, indicating that investor sentiment towards Bitcoin has become more positive. This development is in line with the general trend of increasing acceptance and recognition of Bitcoin as a legitimate asset class.
Institutional activity, as reflected by off-market bitcoin balances, is at its highest level in a year. The surge in institutional holdings further underscores the growing participation of professional investors in the cryptocurrency space. The continued participation of institutions is often seen as a positive sign as it contributes to the overall liquidity and stability of the market.
Additionally, the supply of the leading stablecoin Tether has reached historic milestones. An increase in Tether supply indicates an increased demand for stablecoin assets, which are widely used for liquidity provision and trading purposes within the crypto ecosystem. The reduction in USDC supply could be a factor that could push users towards Tether as an alternative stablecoin.
