Bitcoin (BTC) is becoming increasingly scarce on exchanges as long-term investors are holding onto their assets like never before. Data from onchain analytics platform Glassnode reveals that the “illiquid supply” of Bitcoin has reached a record high of 14 million BTC.
This signifies a growing trend of Bitcoin finding its way into the hands of entities that are unlikely to sell, indicating strong conviction in the cryptocurrency’s long-term price appreciation. Glassnode defines “illiquid entities” as those with a low ratio of Bitcoin outflows compared to inflows, essentially “hoarders” anticipating future gains.
The 30-day rolling increase in illiquid supply hit 180,000 BTC this week, the largest jump since December 2022, when the previous bear market was bottoming out. This suggests a significant shift in investor behavior compared to previous market cycles.
This bull market is distinct due to the increasing participation of institutional investors, including corporate treasuries like MicroStrategy and the highly successful US spot Bitcoin exchange-traded funds (ETFs). These entities are absorbing a significant portion of the available Bitcoin supply, further contributing to its illiquidity.
Onchain data also shows that large Bitcoin holders, known as “whales” and “sharks” (holding between 10 and 10,000 BTC), have been actively accumulating during the recent price rebound. In the past 30 days alone, this key investor tier has added over 83,000 BTC to their holdings, according to research firm Santiment. This contrasts with retail investors, who appear to be exhibiting more panic-selling behavior.
The record illiquid supply, coupled with strong institutional demand and whale accumulation, paints a picture of decreasing readily available Bitcoin, potentially setting the stage for further price appreciation as supply becomes increasingly constrained.
