Illiquid BTC Ratio Hits All-Time High, Supply Shock Intensifies
CryptoNewsTerminal Staff04 Sep, 2024
Illiquid BTC Ratio Hits All-Time High, Supply Shock Intensifies
According to a report by CoinDesk, the percentage of illiquid Bitcoin (BTC) has reached an all-time high of 74%, indicating a significant portion of the total supply is being held by entities with a long-term investment horizon. Data from European crypto asset manager ETC Group and Glassnode suggests that illiquid entities currently hold 14.61 million BTC, which is equivalent to approximately $826 million and represents 74% of the 19.75 million BTC in circulation. This marks a significant increase compared to previous levels. André Dragosch, Head of Research at ETC Group, analyzed that this trend is indicative of a supply shock, which is intensifying due to the halving of block rewards in May 2020. The halving event reduced the number of new BTC entering the market by 50%, effectively reducing the supply. Dragosch believes that this supply shock, coupled with the high percentage of illiquid BTC, will have a positive impact on the prices of cryptocurrencies like Bitcoin in the coming months.
