The Illiquid Supply of Bitcoin Reaches Historic High on April 6th

On April 6th, according to Glassnode’s latest data, the illiquid supply of Bitcoin has reached 15.056 million units, setting a historic high, accounting for approximately 78% of the total circulation supply. Most of these Bitcoins are stored in cold storage wallets or unmanaged wallets and do not appear in circulation.

Data: Bitcoin’s non liquid supply has exceeded 15 million units, setting a new historical high

The latest data from Glassnode shows that on April 6th, the illiquid supply of Bitcoin has reached a historic high, accounting for approximately 78% of the total circulation supply. This means that most of these Bitcoins are stored in cold storage wallets or unmanaged wallets and do not appear in circulation. In this article, we will explore what this means for Bitcoin and its users.

What is Illiquid Supply?

Illiquid supply refers to the number of Bitcoins that have not moved in at least 5 years. These Bitcoins are considered “inactive” and are not available on the market or in circulation. They are often held in long-term storage, either in cold storage wallets, which are offline and less vulnerable to hacking, or unmanaged wallets, which are not actively traded.

Why is the Illiquid Supply Reaching a Historic High?

The rise in the illiquid supply of Bitcoin can be attributed to several factors. First, the price of Bitcoin has been steadily increasing since the beginning of 2021, which has incentivized investors to hold onto their Bitcoins for the long-term. Additionally, the current economic climate, which is characterized by low interest rates and high inflation, has made Bitcoin a more attractive investment option.

What Does This Mean for Bitcoin?

The increase in the illiquid supply of Bitcoin has several implications for the cryptocurrency. First, it indicates that there is a growing number of investors who believe in Bitcoin’s long-term potential and are willing to hold onto their assets for an extended period of time. This is a positive sign for Bitcoin, as it suggests that there is a strong base of support for the cryptocurrency.
However, the rise in the illiquid supply of Bitcoin also means that there is less Bitcoin available for trading, which could potentially result in increased volatility in the market. This could make it more difficult for traders to accurately predict the price of Bitcoin and could lead to more price fluctuations.

How Should Bitcoin Users Respond?

For Bitcoin users, the rise in the illiquid supply of Bitcoin underscores the importance of long-term thinking. If you believe in the long-term potential of Bitcoin, it may be wise to hold onto your assets for the long-term and avoid trying to time the market.
Additionally, for investors who are looking to trade Bitcoin, it is important to be aware of the potential volatility that could result from the rise in the illiquid supply of Bitcoin. Traders should exercise caution and carefully monitor market trends before making any significant investments.

Conclusion

The rise in the illiquid supply of Bitcoin is a significant development for the cryptocurrency, indicating a growing number of investors who believe in its long-term potential. However, the increase in illiquid Bitcoins also raises concerns about market volatility and highlights the importance of responsible investing and long-term thinking.

FAQs

1. How does the rise in the illiquid supply of Bitcoin impact the price of the cryptocurrency?
– The rise in the illiquid supply of Bitcoin could potentially increase volatility in the market, making it more difficult for traders to predict the price of Bitcoin.
2. Why are investors holding onto their Bitcoins for the long-term?
– The rise in the price of Bitcoin, coupled with the current economic climate, which is characterized by low interest rates and high inflation, has made Bitcoin a more attractive long-term investment option.
3. Should I hold onto my Bitcoin for the long-term?
– If you believe in the long-term potential of Bitcoin, it may be wise to hold onto your assets for an extended period of time. However, traders should exercise caution and carefully monitor market trends before making any significant investments.