According to analyst firm Glassnode, 78% of BTC is not in circulation. This could be the reason for the “bullish rally” in Bitcoin, which again reached another high – $ 29,280.
Most bitcoins are illiquid, according to a Glassnode report. To date, only 4.2 million BTC (22%) are available for buying and selling. The fact is that this asset is bought up by large investors for long-term storage, and this has a great impact on the growth of the first cryptocurrency rate. The result is a supply crisis that weakens the bears’ influence on the market. The increase in the number of illiquid bitcoins indicates an increased interest of investors in this cryptocurrency, which can be regarded as a prerequisite for its further growth.
Long-term investors who buy bitcoin are effectively taking it out of circulation. In 2020, many large firms have entered the crypto space and see the first cryptocurrency as the best way to preserve wealth. More than 1 million BTC has become illiquid this year alone, according to Glassnode analysts. Experts believe that large companies are unlikely to sell bitcoin, and this creates conditions for the formation of a “bull market”.
This assumption is corroborated by the words of MicroStrategy CEO Michael Saylor, who recently announced that his company would not sell BTC for 100 years. Quantum Economics analyst Pedro Febrero called the Glassnode report “great news.” If the supply of bitcoin is limited, then its price will rise, even if the demand for this cryptocurrency remains at the same level.
“We know for sure that the demand for bitcoin is really growing. If only 22% of all BTC is in circulation, and wealthy people and firms continue to acquire them, then it is impossible to predict how high the rate of this cryptoasset might rise. Lack of cryptocurrency isn’t always a bad thing. This means that it will never disappear, ”said Febrero.
Bitcoin’s liquidity and exchange rate go hand in hand. If institutional investors continue to buy Bitcoin, it will only grow. Note that on December 30, the BTC rate again reached another maximum – $ 29,280.
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