About 78% of Bitcoin out of circulation from crypto exchanges

Nearly 78% of Bitcoin BTC/USD the total circulating supply is illiquid, as investors have taken their digital assets off exchanges and stored them in custodial wallets, to avoid selling them.

According glass knot string data parsed by Cryptoslate, only 22% of all Bitcoins mined move and are traded. Bitcoin has been trading lower for most of 2022, triggered by the crypto winter and collapse of FTX FTT/USD crypto exchange.

“Think of illiquidity as when Bitcoin moves to a wallet that shows no spending history, while liquidity is when BTC moves to wallets that have a spending history such as hot wallets and exchanges” , Cryptoslate researchers said.

Data from Glassnode shows that less Bitcoin is available for trading, implying that there is a high level of accumulation and holding. Additionally, the dwindling liquid supply is an indication that the sell-offs and capitulations are easing.

Of the 15 million Bitcoins that are not available for purchase, 4.3 million are in constant circulation. A large portion of these coins are held either by short-term investors or traders. Thus, positioning Bitcoin’s supply shock at the same level as when it was valued at $53,000 indicates that short-term holders lost out to long-term holders.

At the time of writing, BTC was trading at $16,960, down 0.81%, in the past 24 hours.

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This article has been originally published on Benzinga and appears here with permission.