Bitcoin’s illiquid supply has reached a historic milestone, now standing at 14.3 million BTC, according to data from Glassnode. This figure marks a significant increase of over 422,430 coins since the beginning of the year, representing more than 72% of Bitcoin’s current circulating supply, which is approximately 19.92 million BTC.
The classification of these holdings as “illiquid” indicates that they are in the hands of long-term holders (LTHs) and are not being actively traded. This trend reflects a growing conviction among investors to retain their Bitcoin as opposed to liquidating it, which effectively reduces the amount of BTC available for trading on exchanges. The accumulation strategies demonstrated by these long-term holders and “whales” highlight a shift in market dynamics and investor sentiment.
Asset management firm Fidelity projects that long-term holders and corporate treasuries could collectively lock up more than 6 million BTC by 2025. This potential tightening of supply could contribute to upward pressure on Bitcoin’s price. Since 2016, the proportion of Bitcoin held by long-term holders has been steadily increasing quarter-over-quarter. Additionally, the supply held by publicly traded companies with significant BTC holdings has also seen consistent growth since 2020, indicating a deeper institutional commitment to Bitcoin.
The recent data reveals a 30% increase in the combined holdings of corporate Bitcoin reserves and ETF issuers, rising from 2.24 million BTC at the start of the year to 2.88 million BTC. This trend underscores a consolidation of Bitcoin into the portfolios of major institutional and corporate investors.
Significantly, Bitcoin whales and larger holders are currently absorbing BTC at unprecedented rates—close to 300% of the yearly mined supply. On the flip side, outflows from exchanges have reached historic levels, with the yearly absorption rate by exchanges plummeting to below -150%. This shift indicates a growing preference among investors for self-custody and long-term holding strategies, rather than utilizing exchanges for trading.
The dramatic changes in Bitcoin’s supply dynamics, driven by increasing institutional adoption and persistent demand for Bitcoin-based financial products, highlight the currency’s evolving role in the financial ecosystem. This structural transition suggests that the market may be entering a new phase characterized by reduced availability for trading and sustained bullish outlooks among major players in the space.
The information provided does not constitute investment advice; individuals are encouraged to carry out their own research before making any financial decisions.
