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October 4, 2022
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Bitcoin

Demand for Bitcoin is growing amid restricted supply

The amount of illiquid supply of Bitcoins on the network has grown more than the circulating supply since 2017

Cryptocurrency experts argue that this strong demand in the Bitcoin market is largely attributed to the fact that institutions are coming.

Market liquidity is narrowing in the Bitcoin market, as there are less than 4 million BTCs in circulation available to future investors, including Grayscale, Paypal, Microstrategy, hedge funds and so on.

Only 21 million Bitcoins will be produced in total and there are currently around 18.9 million Bitcoins in circulation.

This shows a difference of about 2.1 million Bitcoins that are still missing to be produced, not to mention the 4.5 million Bitcoins that have already been lost forever.

It also means that liquidity is drying up, as demand for the world’s most popular cryptocurrency hits record highs.

“The amount of illiquid supply of Bitcoins on the network has grown more than the current supply since 2017.

Meanwhile, the net supply continues to show a sharp drop.

Combine this with the demand for MSTR, Square, Tesla, Grayscale, etc. Understand how optimistic this is. ”

According to Yann & Jan:

“The fluctuation in the network is drying up faster than ever.

Currently, about 78% of bitcoins issued are lost or hodled, leaving less than 4 million Bitcoins to be shared among future market participants (including Paypal, Square, SP500 Companies, ETFs, etc.). ”

It is important to understand that institutional investors love transparency. The regulation means that the more regulated Bitcoin mechanisms, like the regulation of cryptocurrency exchanges, the greater the value that major institutions will place on it, making Bitcoin a less volatile asset in the long run.

Glassnode also revealed that one million Bitcoins (BTC) or nearly $ 30 billion in real prices disappeared from net supply in 2020. This process even outpaced the flow of new Bitcoins (BTC) on the network:

“Currently, we are in a phase in which the illiquid supply is growing more than the total supply in circulation, according to the report. A similar pattern occurred during the 2017 hike. ”

Source: Nairametrics

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