Značka: supply

Wait and see approach: 3/4 of Bitcoin supply now illiquid

Bitcoin markets have been consolidating since the beginning of the year, but on-chain metrics are painting a more positive picture as more of the asset is becoming illiquid.On-chain analytics provider Glassnode has been delving into Bitcoin supply metrics to get a better view of the longer-term macro trends in its weekly report on Jan. 3.The findings revealed that although the asset has been trading sideways so far this year, more BTC has become illiquid. There has been an acceleration in illiquid supply growth which now comprises more than three quarters, or 76%, of the total circulating supply.Glassnode defines illiquidity as when BTC is moved to a wallet with no history of spending. Liquid supply BTC, which makes up 24% of the total, is in wallets that spend or trade regularly such as exchanges and hot wallets.“We can see that over the final months of 2021, even as prices corrected, there has been an acceleration of coins from liquid, into Illiquid wallets.”The figures suggest that more Bitcoin is being transferred into storage indicating an increase in hodling habits and accumulation. The decline in highly liquid supply also hints that there may not be a major selloff or capitulation event at any time in the near future.BTC liquid and illiquid supply as a percent of the total: GlassnodeThe researchers concluded that these conditions indicate “divergence between what appears to be constructive on-chain supply dynamics, compared to bearish-to-neutral price action.”Related: Just 1.3 million Bitcoin left circulating on crypto exchangesIn the same report, Glassnode stated that the total supply held by long-term holders has plateaued over the past month or so. This suggests that longer-term investors have stopped spending or selling coins and have become hodlers or even accumulators at this stage. “This provides another constructive view of market conviction,” it concluded.The current supply held by long-termers is 13.35 million BTC, a decline of just 1.1% from October’s high of 13.5 million coins. Glassnode defines these long-term holders (LTH) as wallets or accounts that have held their Bitcoin for more than 155 days.

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Only 10% of Bitcoin supply left to mine

Total circulating Bitcoin (BTC) hit a significant milestone on Monday morning, one and a half years after the last Bitcoin halving, as 90% of the maximum total supply has been mined.Current data from Blockchain.com shows Bitcoin in circulation hit 18.899 million as of Dec. 13, meaning only 10% of the total supply is left to mine. While the first 90% of BTC took about 12 years to mine, the rest will take a little longer. Bitcoin has a hard cap of 21 million coins set by its anonymous creator Satoshi Nakamoto. This limitation is written in Bitcoin’s source code and enforced by network nodes. The hard cap on Bitcoin is critical to its value proposition as a currency and an investment tool.Bitcoin circulating supply. Source: Blockchain.comAs detailed by Cointelegraph, it would take 119 years from now to complete the Bitcoin mining process due to the rate of producing new Bitcoin being cut by half every four years in a pre-determined protocol execution, also known as the Bitcoin halving. Related: The history of Bitcoin: When did Bitcoin start?Since the Bitcoin blockchain only creates new BTC as a reward for miners verifying new blocks, the halving ensures less Bitcoin is produced as the total circulating supply increases. Since May 2020, miners have earned 6.25 Bitcoin for every new block verified. This rate would decrease to 3.125 BTC per block in the next halving in 2024.By 2040, the block reward will have reduced to less than 0.2 BTC and only 80,000 Bitcoin out of 21 million will be left up for grabs. The last Bitcoin would take close to 40 years to mine.The Bitcoin price started the week with a fresh rejection of $50,000 as the end-of-year close is fast approaching. It is almost 30% down from its all-time high of $68,789 reached on Nov. 10 at the time of publishing.

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