- The total BTC balance across all exchanges was equivalent to just 11.7% of the total circulating supply.
- The amount of BTC available for purchase reached an all-time low.
Despite Bitcoin’s Profits [BTC] during the recent rally, most long-term investors continued to withdraw coins from exchanges in favor of self-custody. According to a popular Twitter user tracking crypto markets, the supply of BTC on exchanges reached a 5-year low on June 30, demonstrating investors’ propensity for HODL.
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Fluid supply shrinks
As of June 30, the total BTC balance across all exchanges was 2.2 million, representing just 11.7% of the total circulating supply. Such balances were last seen during the historic bull market of 2017. But unlike now, they were on a steady upward trend.
Source: Glassnode
As expected, the decline in BTC’s liquid supply was driven by seasoned investors. Long-term investors have consistently accumulated coins and transferred them to self-custody, accounting for nearly 75% of the total supply.
On the other hand, the supply of short-term investors or the active traders has decreased significantly over the past two years.
Source: Glassnode
What are the factors driving this?
A large number of reasons can explain this behaviour. Concerns about the safety of funds in centralized exchanges, exacerbated by the collapse of large entities such as FTX, have been a driving force. Regulatory action against other behemoths like Coinbase and Binance have only made things worse.
However, it’s not just the negativity that was behind the HODLing trend. Over the years, BTC has shown resilience amid market implosions and regulatory animosities.
Because of this, it was increasingly seen as a ‘Store of Value’ rather than a speculative asset in intraday trading. Growing interest from TradFi giants has also increased its long-term growth potential.
A prolonged bullish signal?
Will Clements, co-founder of a crypto research firm, took to Twitter to explain what this ongoing trend could mean for BTC prices in the near term.
When the amount of BTC available for purchase bottomed out, he expected that future buyers would have to pay significantly higher prices to convince long-term holders to sell their holdings.
Source: Glassnode
How much are 1,10,100 BTC worth today?
Meanwhile a report of The Wall Street Journal revealed that the recent applications to launch a spot Bitcoin ETF were deemed inadequate by the US Securities and Exchange Commission.
At the time of writing, BTC was recovering to $30,433.55, but still down 0.81%, according to CoinMarketCap.
