Record 74% of BTC’s Circulating Supply Now Held by Illiquid Bitcoin Entities

Bitcoin, the world’s leading cryptocurrency, has seen a significant shift in its market dynamics. Recent data reveals that a record 74% of Bitcoin’s circulating supply is now held by illiquid entities. This development has significant implications for the cryptocurrency’s future, particularly in terms of its price and stability.

Understanding Illiquid Bitcoin Entities

Before delving into the implications of this development, it’s crucial to understand what illiquid Bitcoin entities are. These are Bitcoin wallets that have received and held Bitcoin for a significant period without moving them. In other words, these entities are not selling their Bitcoin, making them ‘illiquid’.

Why is this Significant?

The fact that a record 74% of Bitcoin’s circulating supply is now held by illiquid entities is significant for several reasons:

• Reduced supply: With more Bitcoin being held by illiquid entities, the available supply for trading is reduced. This can lead to increased competition among buyers, potentially driving up the price.
• Increased stability: When large amounts of Bitcoin are held by entities that are not selling, it can contribute to market stability. This is because it reduces the likelihood of large sell-offs that can cause price volatility.
• Indication of long-term confidence: The fact that a large proportion of Bitcoin is being held by illiquid entities could be interpreted as a sign of long-term confidence in the cryptocurrency. This could attract more investors, further driving up demand and potentially the price.

Case Study: The Impact of Illiquid Bitcoin Entities on Bitcoin’s Price

A clear example of the impact of illiquid Bitcoin entities on Bitcoin’s price can be seen in the cryptocurrency’s performance in 2020. Despite the global economic uncertainty caused by the COVID-19 pandemic, Bitcoin saw a significant increase in its price. This was largely attributed to the increasing number of illiquid entities holding onto their Bitcoin, reducing the available supply and driving up the price.

What Does This Mean for Bitcoin Investors?

For Bitcoin investors, this development could be seen as a positive sign. The reduced supply and increased demand could potentially