Bitcoin illiquid supply Soars to Record 14M BTC as Hodlers & Whales Accumulate
The world of cryptocurrency is buzzing with significant onchain data revealing a major trend among Bitcoin investors. A remarkable 14 million BTC has now reached ‘illiquid supply’ status, signaling a strong long-term conviction among those holding the digital asset. This milestone, reported by onchain analytics firm Glassnode, represents a new record for Bitcoin illiquid supply, indicating that more Bitcoin is being held for the long haul than ever before.
Understanding Bitcoin Illiquid Supply
What exactly does ‘illiquid supply’ mean in the context of Bitcoin? Glassnode defines ‘illiquid entities’ as those that hold onto their acquired Bitcoin rather than selling it. This is measured by a ratio of cumulative inflows versus outflows. An entity is considered illiquid if this ratio falls below a certain threshold, indicating they spend very little of the Bitcoin they receive.
- Illiquid entities hoard coins.
- They anticipate long-term BTC price appreciation.
- The illiquid supply metric tracks the total amount of BTC held by these entities.
Reaching 14 million BTC in illiquid supply highlights a significant shift in investor behavior towards accumulation and holding, rather than trading or spending.
Bitcoin Illiquid Supply Sees Largest Jump
The increase in illiquid supply hasn’t been gradual; the past 30 days have seen the largest jump of the current bull market. Approximately 180,000 BTC moved into illiquid status during this period. This rate of increase hasn’t been observed since December 2022, a time when the previous bear market was concluding and the BTC price was near its lows.
This recent surge in Bitcoin illiquid supply suggests that even as the BTC price has returned to six figures, many investors are choosing to secure their holdings rather than realize profits. This behavior is a key characteristic of strong conviction within the market.
Bitcoin Hodlers Show Record Conviction
The term ‘hodler’ is core to this trend. These are the dedicated Bitcoin holders who buy and hold BTC through market volatility, believing in its long-term value proposition. The fact that Bitcoin illiquid supply is at an all-time high underscores the unwavering conviction of these Bitcoin hodlers. They represent a significant portion of the supply that is effectively removed from active trading, reducing potential selling pressure on the market.
Bitcoin Whales Continue Accumulation
It’s not just small holders contributing to this trend. Onchain data indicates that large players, often referred to as Bitcoin whales (entities holding 10 to 10,000 BTC), are also accumulating. Research firm Santiment reported that this tier of holders added 83,105 more BTC in the past 30 days.
This significant Bitcoin accumulation by whales, alongside the broader increase in illiquid supply, paints a picture of large and dedicated investors reinforcing their positions. This contrasts with some retail investors who may show signs of panic selling during price dips, as noted by Santiment.
Institutional interest, driven by factors like US spot Bitcoin ETFs and corporate treasuries, has also played a role in making Bitcoin a more mainstream asset. This institutional adoption likely contributes to the overall trend of Bitcoin accumulation by larger entities.
Impact on BTC Price
What does this record Bitcoin illiquid supply mean for the BTC price? When a large portion of the supply is held by entities with no immediate intention to sell, it reduces the available supply on exchanges. All else being equal, reduced supply in the face of consistent or growing demand can put upward pressure on the BTC price.
The combination of strong Bitcoin hodler conviction, significant Bitcoin accumulation by whales, and increasing illiquid supply suggests underlying strength in the market structure, even amid price fluctuations. As the BTC price navigates the current market cycle, the behavior of these long-term holders will remain a critical factor to observe.
Please note: This article provides market information based on onchain data and should not be considered investment advice. Investing in cryptocurrencies involves risk, and readers should conduct their own research before making any investment decisions.
In conclusion, the milestone of 14 million BTC reaching illiquid supply is a powerful indicator of long-term belief in Bitcoin’s future. The persistent accumulation by Bitcoin hodlers and whales, as shown by onchain data, highlights a market where a significant portion of the supply is locked away, potentially impacting future BTC price movements. This record illiquid supply is a testament to the enduring strategy of holding Bitcoin for potential long-term appreciation.
