Despite regulatory risks, Bitcoin BTC 0.30%’s illiquid supply hit an all-time high of 15.2 million, according to Glassnode data, suggesting continued market demand.
A recent report by blockchain analytics firm Glassnode shows that despite Bitcoin’s current regulatory risks, the market is still showing strong demand for the cryptocurrency.
Bitcoin’s illiquid supply reached an unprecedented milestone this week, surging to an all-time high of 15.2 million. Meanwhile, exchange balances have fallen to their lowest level since January 2018, at just 2.3 million bitcoins.
Notably, entities holding less than 100 BTC have been steadily increasing their positions, absorbing a significant portion of miner supply over the past month. This inflow is equivalent to 254% of the daily production of 900 BTC, which equates to the absorption of approximately 2,286 BTC per day.
Additionally, entities holding 100 to 1,000 BTC experienced positive changes in balances, absorbing approximately 36% of the mining supply.
Interestingly, entities holding around 100 BTC (including whale investors and miners) have become net sellers, releasing assets equivalent to 70% of the mining supply. This shift in behavior suggests that larger entities are taking advantage of current market conditions, potentially taking advantage of recent price volatility.
While the regulatory environment surrounding bitcoin remains uncertain, with various jurisdictions exploring potential measures, continued demand for cryptocurrencies suggests resilient investor sentiment. Despite the potential risks and challenges posed by regulatory developments, Bitcoin’s appeal as a decentralized and digital store of value continues to attract market participants.
The increase in Bitcoin’s illiquid supply reflects an increasing number of individuals and entities choosing to hold Bitcoin rather than actively trade or transfer Bitcoin on exchanges. The trend shows growing confidence in bitcoin’s long-term potential and willingness to withstand short-term market volatility.
As the cryptocurrency ecosystem develops and regulatory frameworks take shape, market participants will closely monitor the impact of such measures on Bitcoin supply and demand dynamics. The data provided by Glassnode provides valuable insights into the behavior of different entities in the Bitcoin market, revealing the overall sentiment and trends shaping the industry.
