Only 1.3 million bitcoins remain in circulation on cryptocurrency exchanges | Cryptocurrency

Good news for an orange Christmas, the supply of Bitcoin (BTC) is depleting to levels not seen in years. In a recent CryptoRank tweet, only 6.3% of the total supply of Bitcoin, or 1.3 million BTC, is held on cryptocurrency exchanges.

The drop in supply is nothing new, trending down since Bitcoin halved in 2020 when the BTC block reward was cut in half. The availability of BTC on exchanges has followed suit, slowly declining over the past year. Exchange wallets accounted for 9.5% of the BTC supply in October 2020, just before the 2020 Christmas all-time highs, and 7.3% in July this year. The 6.3% figure for December is the lowest recorded in 2021.

Interestingly, the dominance of Coinbase’s BTC wallet is also declining. The US exchange had more BTC than all other exchanges combined. Its domain has grown from 50.52% to 40.65% in the last year.

The news follows a series of positive price metrics that coincide with the rise in Bitcoin price action. First, the supply of illiquid BTC froze over the winter as the supply of BTC changing from a “liquid” to a “non-liquid” state is now 100,000 BTC per month. Essentially, more BTC is locked in a cold room than the amount mined.

Glassnode, the chain analytics company, shared more optimistic news on business behavior. The seven-day moving average of BTC trade entry volume just hit a 5-month low at 978,452 BTC and has been trending down week after week. Supply shortages on exchanges may continue with less and less BTC sent to exchanges.

Also, it is important to note that many retail investors and some companies store their BTC on exchanges, indicating that the “illiquid” BTC may be even less. Some BTC hodlers would leave custody of their keys for exchanges instead of disconnecting their BTC in a cold store.

Unsurprisingly, Binance CEO and Co-Founder Changpeng Zhao has encouraged the practice of the hot wallet, despite the best efforts of Bitcoiners like Andreas Antonopolous to ensure that ‘not your keys, not your Bitcoin’ is a part. of the daily BTC mantra.

As a result, while 1.3 million BTC is based on exchanges, they may not ‘flow’ and actually contribute to illiquid supply.

However, despite calls for a “Santa meeting” based on a bullish analysis, traders are still not out of the woods. A tweet from BullRun Invest using data from Glassnode shows that 24.6% of all BTC supply is above the price of $ 47,000.

This suggests that around a quarter of the BTC purchased at these price points is currently under water. If BTC fails to progress into the 1950s, there could be fewer gifts under the tree tomorrow.

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