CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$23,580.00
  • ethereum
    ETH$1,615.13
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    • Opinions
    CryptoPotato
    CryptoPotato
    • Crypto News
    • Margin Trading
    • Guides
      • Bitcoin & Crypto Guides 101
      • Bitcoin For Beginners
      • Editorials
    • DeFi & NFT
    • Buy
    • Language
    • Crypto News
    • Bitcoin For Beginners
    • Cryptocurrency Guides 101
    • Editorials
    • Bitcoin & Crypto Margin Trading
    • DeFi & NFT News
    • Bitcoin Price Analysis
    • CryptoPotato Crypto Fund
    • Ethereum (ETH) Price Analysis
    • Ripple (XRP) Price Analysis
    • Market Updates
    • Interviews
    • Buy Bitcoin with Card
    Home » Crypto News » Bitcoin’s Supply Liquidity Crisis is Extremely Bullish For BTC Price, Says Glassnode CTO

    Bitcoin’s Supply Liquidity Crisis is Extremely Bullish For BTC Price, Says Glassnode CTO

    Author: Jordan Lyanchev

    Last Updated Dec 22, 2020 @ 19:16

    Even after recently charting a new ATH, Glassnode’s CTO outlined several reasons suggesting that BTC is in an ‘extremely bullish’ liquidity crisis.

    Bitcoin could be headed towards a bullish supply and liquidity crisis, said Glassnode’s Chief Technology Officer. He came to this conclusion after reviewing recent BTC developments, including institutional adoption, bitcoin hodlers, exchange balances, and miners’ supply.

    BTC Wallets, Lost Coins, And More

    Rafael Schultze-Kraft, the CTO at the analytics company Glassnode, explored different BTC stats, metrics, and recent developments that point out an ongoing supply and liquidity crisis.

    He addressed the well-known maximum supply of 21 million bitcoins ever to exist but noted that the real number is substantially smaller. At least three million coins are considered lost and unretrievable, accounting for about 16% of the hard cap.

    Bitcoin Adjusted Circulating Supply. Source: Glassnode
    Bitcoin Adjusted Circulating Supply. Source: Glassnode

    Glassnode’s executive further reviewed the so-called Bitcoin accumulation addresses that contain 2.7 million coins. Those are wallets that have only received bitcoins and have never spent any funds. Schultze-Kraft described them as “true hodlers,” that own 14.5% of the circulating BTC supply.

    Bitcoin Accumulation Addresses. Source: Glassnode
    Bitcoin Accumulation Addresses. Source: Glassnode

    The number of bitcoins stored on cryptocurrency exchanges has declined by 20% since the start of the year. Schultze-Kraft classified this as the “longest depletion of exchange funds” as investors have continually transferred their holdings to long-term storages. Ultimately, this means that the liquidity on trading venues has decreased significantly this year.

    Miners have averted from cashing out at these prices as the current miner balance stands at 1.7 million bitcoins. In fact, the number of BTC that has never left miners’ addresses has only increased since the 2020 halving.

    Bitcoin Unspent Miners' Supply. Source: Glassnode
    Bitcoin Unspent Miners’ Supply. Source: Glassnode

    Institutional Adoption And Grayscale’s Role

    BTC experienced the grand entrance of large corporations, institutions, and prominent investors in the past several months. Names as the NASDAQ-listed business intelligence company MicroStrategy, Jack Dorsey’s Square, insurance giant MassMutual, hedge fund One River Asset Management, and Wall Street behemoth Guggenheim Partners purchased in total billions of dollars worth of bitcoin.

    Schultze-Kraft outlined these developments, saying that they have dried up the liquid supply even more. He also suggested that more similar companies could follow soon.

    Additionally, he addressed the growing role of the leading digital asset manager – Grayscale. Schultze-Kraft said that the company had bought approximately 210,000 bitcoins for its clients in the past six months. Interestingly, this amount actually surpassed the number of mined coins since then – about 185,000 bitcoins.

    It’s also worth noting that the 2020 halving slashed in half the BTC production to 6.25 coins per block. Basic economic principles dictate that if an asset’s supply decreases, while the demand stays the same or increases, that asset is primed for value appreciation.

    Consequently, Schultze-Kraft concluded BTC is in a supply and liquidity crisis, which is a “highly underrated” but “extremely bullish” narrative. He added that “we will see this significantly reflected in Bitcoin’s price in the upcoming months.”

    SPECIAL OFFER (Sponsored)
    Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

    PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

    Tags: Bitcoin (BTC) Price Bitcoin Adoption Bitcoin Halving Grayscale
    Enjoy reading? Share with your friends
    Facebook Twitter LinkedIn Telegram

    About The Author

    Jordan Lyanchev
    More posts by this author

    Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn

  • bitcoin
    BTC$23,580.00
  • ethereum
    ETH$1,615.13
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    Editorials
    2022 Was Crypto’s Dot Com Bust: Let’s Recap Tech Stocks After 2000 (Opinion)

    2022 Was Crypto’s Dot Com Bust: Let’s Recap Tech Stocks After 2000 (Opinion)

    How Long Will the Ethereum LSD Narrative Last? Talking 2023 Trends with Nansen’s Martin Lee

    How Long Will the Ethereum LSD Narrative Last? Talking 2023 Trends with Nansen’s Martin Lee

    Everything That’s Going on With Pi Network: From Start to Latest Controversial Listing

    Everything That’s Going on With Pi Network: From Start to Latest Controversial Listing

    What is Ethereum Liquid Staking and Why It Is Crucial As Shanghai Upgrade Approaches?

    What is Ethereum Liquid Staking and Why It Is Crucial As Shanghai Upgrade Approaches?

    The Lesson in Alameda-FTX About Government Regulation and Crypto (Opinion)

    The Lesson in Alameda-FTX About Government Regulation and Crypto (Opinion)

    5 Bullish and 2 Bearish Cases for DeFi Going Into 2023 (Opinion)

    5 Bullish and 2 Bearish Cases for DeFi Going Into 2023 (Opinion)

    From Google and Microsoft to Binance: Interview with Head of Product Mayur Kamat

    From Google and Microsoft to Binance: Interview with Head of Product Mayur Kamat

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    Footer Logo
    About
    Advertise on CryptoPotato
    About Us | Contact Us | Careers
    Editorial Policy
    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!