Santa Comes Early: Bitcoin’s Supply Crunch
This holiday season, Bitcoin (BTC) supply is disappearing faster than a plate of cookies at a kid’s party. According to a recent update from CryptoRank, only 6.3% of the total Bitcoin supply, or about 1.3 million BTC, is held on cryptocurrency exchanges. It’s as if Santa took a few million coins back to the North Pole for a rainy day!
The Great Bitcoin Withdrawal: Trends Over Time
Since the Bitcoin halving in 2020, when miners got half the rewards, the amount of BTC available on exchanges has been on a downward slope like a sledding hill. Back in October 2020, wallets on exchanges held 9.5% of BTC. Fast forward to July of this year, and that number dropped to 7.3%. Now, with December upon us, we’re at the lowest point recorded for 2021. Looks like the Grinch stole some BTC after all!
Coinbase’s Slipping Grip: A Shift in Exchange Dominance
Coinbase’s stranglehold on BTC is also showing signs of weakness. At one time, this American exchange held more Bitcoin than all others combined. However, its wallet dominance has taken a hit, sliding from 50.52% to a mere 40.65% in the past year. That’s like watching your favorite show get canceled mid-season.
Cold Storage: Where BTC Goes to Chill
The BTC supply is making a chilly trip into cold storage as the supply of liquid BTC turning illiquid has surged to 100,000 BTC per month. For every new coin mined, it seems even more are hidden away for the winter. This could mean that most of the BTC on exchange wallets isn’t really “on offer.” So, even if you’re looking for those elusive coins, they might not be available when you need them most!
Retail Investors and Their BTC: To Store or Not to Store?
Many retail investors and companies are keeping their BTC on exchanges, but this leads to a shortage of circulating BTC. With the saying “not your keys, not your Bitcoin” gaining momentum, there’s an ongoing debate about whether to keep coins on exchanges or transfer them to cold wallets. But, many still allow exchanges to hold their keys – a classic case of “I’ll let you hold my lunch for me.”
The Bullish and Bearish Predictions: What’s Next?
Despite optimistic cries for a holiday “Santa Rally,” caution is advised. A tweet from BullRun Invest revealed that 24.6% of the total BTC supply is currently hanging out above $47,000. This indicates that a big chunk of BTC bought at higher prices sits in the red. If Bitcoin can’t muster up strength to breach the $50,000 mark, the holiday cheer might just be a little less merry this year.
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