Bitcoin reserves on crypto exchanges have shrunk considerably over the years, and for the first time, bitcoin held on exchanges has dropped below 3 million.
According to data from CryptoQuant, bitcoin volume on exchanges now stands at only 2.46 million and more than 171,000 BTC were moved out of exchanges since Donald Trump won the elections and helped to restore investors’ trust to the market. During this time, Bitcoin pumped to $99,600, over 40% increase from $96,000.
Back in January, there were around 3 million BTC available for trading, but now that number has plunged by more than half a million coins.
Back in 2021, the reserves stood at 3.2 million BTC. According to CryptoQuant, “the reduction in liquid supply often means upward pressure on the price because there’s less Bitcoin available for immediate purchase.”
Meanwhile, long-term investors in the crypto space are holding on to their Bitcoin instead of trading it. Glassnode reports that 185,000 BTC were moved into illiquid wallets last month alone. That means roughly 14.8 million BTC, or 75% of all Bitcoin in circulation, is now being stored for the long term rather than being actively traded.
Besides, the Bitcoin market is also being flooded with large institutions. For instance, the Bitcoin ETF managed by BlackRock has recently crossed 500,00 BTC, while MicroStrategy, a business intelligence firm, has recently paid 1.5 billion dollars to acquire an additional 15,400 BTC. With this, MicroStrategy’s overall crypto assets now stands at more than 400,000 BTC, further reducing the volume in circulation for trading.
Around this time, Bitcoin prices have gone down since the start of this month. Post elections, the price subsequently declined to $96,700.
Right now, the crypto is down by 2%, dipping to $94,000 mark, which had previously caused $578 million worth of liquidations in the market.
Nevertheless, analysts claim that Bitcoin’s potential in the long term is immense. With a limited number of Bitcoin sold on exchanges and market demand increasing, they forecast a positive scenario for the cryptocurrency heading into 2025. For now, all eyes are on when Bitcoin will hit $100,000.
Also Read: Why Bitcoin Dropped to $65k in South Korea?
