Bitcoin’s illiquid supply has crossed the 14 million BTC mark. This means more holders are moving their coins off exchanges and into long-term storage. This shift impacts the market in several important ways.
What Is Illiquid Supply?
Illiquid supply refers to Bitcoin held in wallets that show little to no spending activity. These are coins owned by long-term holders or stored in cold wallets. When coins become illiquid, they are effectively removed from the active trading pool. With over 14 million BTC illiquid, more than 72% of all circulating Bitcoin is now locked away.
Why Are Holders Moving Coins Off Exchanges?
Several factors explain this trend:
- Self-Custody Preference: Many investors want more control and security. Moving coins to personal wallets or cold storage reduces risks associated with exchange hacks or failures.
- Regulatory Concerns: Increased scrutiny and regulatory actions against exchanges make holders cautious. Keeping BTC off exchanges helps avoid potential freezes or seizures.
- Institutional Interest: Institutions and large investors are committing to long-term holdings. Their participation adds significant volume to the illiquid supply.
- Market Confidence: Holding coins long-term shows confidence in Bitcoin’s future value, despite price swings.
Recent Data Highlights
| Metric | Value | Notes |
| Illiquid BTC supply | ~14.37 million BTC | Increased from 13.9 million earlier this year |
| Percentage of circulating BTC | Over 72% | Out of ~19.8 million circulating BTC |
| BTC on exchanges | ~2.27 million BTC | Near lowest levels since late 2023 |
| Daily “ancient” BTC (10+ years untouched) | 550 BTC/day | Exceeds daily mining rate of 450 BTC |
What Does This Mean for Bitcoin’s Market?
- Less Sell Pressure: With fewer coins available to trade, the chance of large sell-offs decreases.
- Supply Constraints: When demand rises, limited supply can push prices higher.
- Market Stability: Long-term holders reduce volatility by not reacting to short-term price changes.
Key Takeaways
- More than 72% of Bitcoin’s circulating supply is now illiquid.
- This reflects growing confidence and a preference for self-custody.
- Institutions are playing a major role in locking away coins for the long term.
- Reduced liquidity could lead to price increases if demand grows.
FAQs
Q: What is illiquid supply?
- It’s Bitcoin held in wallets with little spending, usually by long-term holders.
Q: Why move coins off exchanges?
- To increase security and avoid regulatory risks.
Q: How does illiquid supply affect price?
- It limits available coins for trading, reducing sell pressure and potentially raising prices.
Q: Are institutions involved?
- Yes, many institutions hold Bitcoin long-term, increasing illiquid supply.
Bitcoin’s growing illiquid supply shows a market shifting toward long-term confidence and security. This trend could shape Bitcoin’s price and trading dynamics in the months ahead.
