While the BTC price has doubled since the halving for Bitcoin last May, Chainalysis announced that there are only 3.4 million Bitcoins left to be reversed.
Bitcoin experienced its third block halving in May 2020. Experts feared that this, like the previous halving, could have a negative impact on BTC. But there was no fear, and even the BTC price has more than doubled since then. Bitcoin has gained nearly 110% since May, increasing its price to over $ 18,000.
Attention, there are only 3.4 million BTC in circulation!
According to the report published by Chainalysis on November 19, the currency flow and liquidity level have changed dramatically since the halving. In the report, the firm identified two types of wallets that hold BTC: liquidity and non-liquidity.
According to the report; Liquidity-providing wallets are classified as wallets that send at least 25% of the Bitcoin they receive. These wallets are generally regarded as “traders wallets”. Other wallets that do not provide liquidity move less than 25% of BTC assets and are generally regarded as “investor wallets”.
Data from Chainalysis show that the Bitcoin supply has clearly decreased since the beginning of the year; It reveals that investor wallets that do not provide liquidity are on the rise dramatically. The analytics firm suggests that for just 3.4 million Bitcoins that can be purchased, the remaining roughly 15 million Bitcoins may be kept in futures investments, and some may even be lost forever.
Institutional investors turning to Bitcoin further narrow the supply
Chainalysis states that the biggest reason for the low liquidity of Bitcoin during 2020 was institutional investors who bought large amounts of BTC. The analytics firm highlights many of the big names that bought Bitcoin in 2020 such as Paul Tudor Jones, Square, and Microstrategy.
Paul Tudor Jones comparing the Bitcoin investment with the early investment for Google or Apple; He expressed his belief in the future of BTC. Sqaure announced that it allocates 1% of its total assets to Bitcoin. In addition, Grayscale’s BTC investment fund Grayscale Bitcoin Trust announced that it has more than half a million BTC in total under its management. The investment fund is known to have many high profile institutional investors.