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Hoarding Aftermath: Only 22% of Bitcoin left for Traders

Most Bitcoin is non-succulent – 78% – and this is igniting the current bull run, a new report says.

Bitcoin “liquidity” means how much of the asset is in circulation. Glassnode says that only 4.2M Bitcoin (22%) are recently available to buy and sell.

The report says that there is a shortage of Bitcoin for it to be grabbed up by large investors. This trend is making the currency even more expensive.

“If many bitcoins are illiquid, a supply-side crisis emerges—which has a weakening effect on BTC’s selling pressure in the market,” Glassnode says. “Or put differently: A sustained rise of illiquid bitcoins is an indication of strong investor hodling sentiment and a potentially bullish signal.”

The report elucidates that long-term investors that hold the cryptocurrency remove it from circulation. 2020 has been the year that big companies have entered the crypto space and they are buying up Bitcoin and holding it as a long-term investment.

The companies aren’t likely to sell, Glassnode says, and it is causing the current bull market. This year alone, “more than 1M BTC had been illiquid.”

Pedro Febrero, an analyst at Quantum Economics, said that Glassnode’s findings were “superb news.”

“Essentially, when the supply of bitcoin is suppressed, the price has a tendency to rise, given that demand either stays equal or increases,” he said.

“And we know for sure that demand is indeed increasing. If only 22% of all Bitcoin are in circulation, and wealthy individuals keep acquiring Bitcoin, there is no telling how high the price may go.”

A scarcity of the cryptocurrency is not a bad thing: it will never disappear.

The report says that Bitcoin liquidity and the price of the currency go together. And when things keep going the way they have been going this year, the price will still rise.

There it is;

“Less Bitcoin is more.”

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