USD Coin Regains Footing: Circulating Supply Climbs
USDC's supply ascends post-SVB crisis, hinting at market recovery.
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Wait and see: Three-quarters of Bitcoin supply is now illiquid
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The bitcoin market has been consolidating since the start of the year, but on-chain metrics paint a more positive picture as more and more bitcoin assets become illiquid.
On-chain analytics provider Glassnode has been digging into Bitcoin’s supply metrics to better understand long-term macro trends in its Jan. 3 weekly report.
While bitcoin has been trading sideways so far this year, more bitcoin has become illiquid, the findings show. Growth in illiquid supply has been accelerating and now accounts for 76% of total circulating supply, more than three-quarters.
Glassnode defines "illiquidity" as when bitcoins are transferred to a wallet with no history of spending. Liquid Bitcoin accounts for 24% of the total and exists in wallets such as exchanges and hot wallets that are frequently spent or traded.
“We could see an accelerated flow of Bitcoin from liquid wallets to illiquid wallets in the final months of 2021, even as prices correct.”
These figures show that more bitcoins are being moved into vaults, suggesting that people's holding habits and accumulation are increasing. The drop in highly liquid supply also hints that a massive sell-off may not occur in the near future.
BTC liquid and illiquid supply as a percentage of total: Glassnode
The researchers concluded that these conditions point to “a divergence between what appears to be constructive on-chain supply dynamics compared to bearish-to-neutral price action.”
In the same report, Glassnode stated that the total supply held by long-term holders has leveled off over the past month or so. This suggests that at this stage, long-term investors have stopped spending or selling coins and become holders, or even accumulators. "This provides another constructive view on market confidence," the report concluded.
The current supply held by long-term holders is 13.35 million BTC, down just 1.1 percent from October’s high of 13.5 million. Glassnode defines these long-term holders (LTH) as wallets or accounts that hold their bitcoins for more than 155 days.
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