Investors Hesitant to Sell Bitcoin Assets – More Upside Expected?

Aiswarya Gopan•Monday, March 22, 2021•1 min read

Even as the crypto market and Bitcoin experience a bull run lately, the liquid supply of the world’s most popular cryptocurrency is on the decline. According to figures released by Glassnode, the amount of BTC being circulated on-chain has reduced to 36% in the past six months, as opposed to a 50% circulation on-chain seen during the six months prior to the bullish run in 2017.

This indicates a hesitation among long-term investors to sell off their Bitcoin even as its price touches record highs, which in turn points to a high likelihood of further upside for the crypto in the near future. Traditionally in markets, bullishness in a particular instrument increases the interest among sellers to make profits, but it looks like Bitcoin is bucking this trend, with its investors preferring to hold on to their tokens in anticipation of more bullishness coming up.

The total supply of BITCOIN stands at around 18.66 million as on date, which is a little shy of 89% of the total 21 million limit. Of this, around 20% of all BTC tokens have either been lost or stolen, which reduces the available number of tokens for circulation significantly and makes the crypto even more scarce.

Despite Bitcoin’s market cap exceeding $1 trillion, the limited liquidity on-chain suggests the possibility that its market cap may remain above this level for the foreseeable future, with some analysts being strongly optimistic that it may never fall below this level again. However, there is also a possibility that all movements of a cryptocurrency on-chain may not point to increased trading activity – it could also be exchanges moving around their assets internally instead of denoting greater activity among traders.

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ABOUT THE AUTHOR See More

Aiswarya Gopan

Financial Writer & Editor - Asia & Europe Desk

Aiswarya Gopan is a former cybersecurity analyst, tech journalist and market researcher, who joins FX Leaders with over three years of experience in the blockchain industry. Aiswarya's areas of focus include market news out of the Asian and European markets as well as news coverage on cryptocurrencies.