A Look at Bitcoin’s Illiquid Supply and Its Impact on the Cryptocurrency Market

04/06/2023 04:03 • Blockchain Briefs • 82 views

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

Bitcoin’s illiquid supply has recently reached an all-time high, with about 15.056 million units not being in circulation. This is a worrying trend for those who are looking to trade Bitcoins on the market and need access to a larger pool of assets. In this article, we will examine what the illiquid supply of Bitcoin means and its impact on the cryptocurrency market.

What is Illiquid Supply?

To understand the concept of illiquid supply, we need to first understand what liquidity is. Liquidity refers to the ability to sell or buy an asset without significantly affecting its market price. Bitcoin’s liquid supply, therefore, refers to the number of Bitcoins that are readily available for purchase or sale.
On the other hand, Bitcoin’s illiquid supply refers to the number of Bitcoins that are not in circulation and are inaccessible to the market. These Bitcoins are typically stored in cold storage wallets or unmanaged wallets and are not likely to be sold.

The Illiquid Supply of Bitcoin

On April 6th, according to Glassnode’s latest data, the illiquid supply of Bitcoin reached 15.056 million units, accounting for approximately 78% of the total circulation supply. This is the highest illiquid supply that Bitcoin has ever seen and could have a significant impact on Bitcoin’s volatility in the market.
The high illiquid supply could lead to an increase in demand for the limited number of Bitcoins in circulation, thereby driving up the price of Bitcoin. This could also mean that Bitcoin may not experience the high price fluctuations that are typical of cryptocurrencies, as there is a limited supply of assets to trade.

The Impact of Illiquid Supply

The illiquid supply of Bitcoin is a double-edged sword. On the one hand, it indicates that large holders of Bitcoins are not likely to sell their assets soon, which could result in a more stable market for the cryptocurrency. However, it also means that there are fewer assets available for trading, which could lead to higher prices and a more volatile market.
Moreover, the high illiquid supply of Bitcoin means that the cryptocurrency is not as widely circulated as some of its peers. This could have implications for Bitcoin’s growth trajectory in the future, as it may not be able to attract as many new investors as other cryptocurrencies.

Conclusion

The illiquid supply of Bitcoin has reached an all-time high, accounting for approximately 78% of the total circulation supply. This is a worrying trend for those investing in Bitcoin, as the limited supply of assets may lead to higher prices and more volatility in the market. However, the high illiquid supply also means that Bitcoin may not experience the same high price fluctuations as other cryptocurrencies. It’s essential to monitor the illiquid supply of Bitcoin and consider investing in other cryptocurrencies as well.

FAQs:

1. What is the illiquid supply of Bitcoin?
The illiquid supply of Bitcoin refers to the number of Bitcoins that are not in circulation and are inaccessible to the market.
2. Why is the high illiquid supply of Bitcoin a worry?
The high illiquid supply could lead to an increase in demand for the limited number of Bitcoins in circulation, thereby driving up the price of Bitcoin.
3. Will the high illiquid supply of Bitcoin affect the cryptocurrency’s growth?
The high illiquid supply of Bitcoin means that the cryptocurrency is not as widely circulated as some of its peers, which could have implications for Bitcoin’s growth trajectory in the future.
#

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/04/06/a-look-at-bitcoins-illiquid-supply-and-its-impact-on-the-cryptocurrency-market/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.