The stability of Bitcoins on exchanges is steadily declining, having reached its lowest point since December 2017 at this time.
Long-term traders continue to carry in the meantime, utilising the supply.
Cash held on exchanges is now outnumbered by cash that hasn’t been touched in ten years.
The steadiness of stablecoins on exchanges is currently at its lowest level since October 2021, and over the past four months, 45% of the total steadiness of stablecoins on exchanges has been exodus. I wrote a little about this last week.
Nevertheless, stablecoins shouldn’t be the only asset class with an abundance of liquidity. The biggest cryptocurrency in the world is currently seeing money flow out. The current percentage of Bitcoin supply that is available on exchanges is just 11.8%, which is the lowest since December 2017.
To refresh your memory, the previous bull market climax occurred in December 2017. Before free falling into a two-year bear market that decimated your whole trade, Bitcoin rose to within a hair of $20,000 in value.
Bitcoin reserves on exchanges have only been trending in one direction since January 2020: down. With the much-heralded difficult supply cap of 21 million cash for Bitcoin, it alludes to the demand/supply imbalance that so many Bitcoin truthers argue for.
They contend that if demand keeps increasing, the price can only increase because supply can no longer keep up.
The ability of long-term holders to keep a firm hold on their bitcoins is essential to this notion. And when asked if they have, the response is a resounding yes.
Long-term investors are shown in the below chart relative to the overall alternate steadiness. The number of bitcoins that were active 10+ years ago surpassed the number of bitcoins available on exchanges in November 2022.
In fact, some of these long-term holders will likely lose money, either because their owner passes away or because they forget their own keys.
The statistic is still intriguing, though, and it points to the group of (very) early Bitcoin investors who are still doing all in their power to hold onto their money. Remember that this includes the anonymous Satoshi Nakamoto, who is said to own over one million dollars, or 5% of the whole supply.
The outcome is intriguing, but much more so when you consider that the previous three years saw both the ecstatic highs of Bitcoin at about $70,000 during the epidemic and the bone-crushing decline by 2022, which saw it careen down towards $15,000.
It Is clearly optimistic in terms of Bitcoin’s long-term direction. In actuality, everything hinges on whether or not the demand for more Bitcoin will continue to grow. Even though the supply might be constrained, the discount won’t last if the demand side doesn’t keep up its end of the bargain.
The past year has been a huge blow on that note. Not only has money left the region at an alarming rate,LUNA, Celsius, FTX, and other extremely high-profile scandals, however, have shaken the region. The issue is that these incidents have damaged the reputation of the cryptocurrency industry and may reduce demand for Bitcoin on an intuitive level. Has anyone put off moving into the neighbourhood? It takes effort to say. But, when examining long-term holders, their trust seems unwavering.
