Bitcoin’s exchange supply ratio witnessed an incredible decline since the start of 2021. It is now at its lowest point yet, with bitcoin traders able to buy more coins than they sell!
The leading digital exchanges now hold only 6.2% of the total circulating supply for Bitcoin, which is a drastic decrease from their peak at 50%. As these crypto addresses moved large amounts into cold storage and unknown wallets over recent months this has led many cryptocurrency experts to predict that we may be soon entering another bear market similar to what happened last year when prices decreased 80%.
In a recent study conducted by CryptoRank, it was found that over one million bitcoins are currently being held by crypto trading platforms. These coins come from bitcoin whales who maintain large amounts of the cryptocurrency on behalf of its owners and traders alike!
The total number of Bitcoins in circulation currently stands at around 18.9 million, which is not surprising given that it only gained popularity in 2009 and there has been 12 successful bitcoin mined every 10 minutes since inception.
The bitcoin price is up nearly 60% this year, but there may be one reason it’s not too high for some investors. The shrinking exchange supply ratio has played an important role in its growth during 2021 – when you take into account all cryptocurrencies are worth over $150 trillion dollars combined!
The price of Bitcoin skyrocketed this year, with the currency reaching an all-time high of nearly $69,000 in November. The limited supply and huge demand pushed up on prices for Bitcoins which lead them to be worth more than gold or silver – even though it doesn’t have any practical use yet.
Coinbase is a widespread digital asset exchange that holds the largest BTC supply. CryptoRank, an online platform for ranking cryptocurrency trading sites and exchanges by volume said that it has more than 580K coins as of now followed closely behind by Binance and Bitfinex manages to hold third place.
As the crypto market rapidly evolved, exchanges and trading platforms emerge to meet demand. These digital markets are a safe place for investors who want access to different coins at once without having them on multiple exchange sites which can be confusing or overwhelming with all their differing features. In 2021, nearly all of the exchanges saw consistent outflows. Digital Exchanges OKEx and Bitflyer were exceptions with only minor fluctuations in their values compared to other cryptocurrencies during this time period.
Short-Term BTC Holders
The price of Bitcoin briefly dipped below $5000 this week but rebounded with some decent gains to reach a new all-time high just shy of 51 thousand dollars. This means that even though short-term holders suffered significant losses due to the recent volatility in cryptocurrencies, long-term investors can still make money by buying low and selling high when they see fit!
“Presently, Short-Term Holders finds themselves in aggregate loss, though the pace of decline has slowed along with the price. While these coins continue to churn among different hands, their lifespans stay young and they remain members of Short-Term Holder Supply. The rotation of coins among newer owners can also be seen in the rate of change of Short-Term Holder Realized Price. As owners of the youngest supply, their cost basis is more responsive to price than their Long-Term Holder cousins. Interpretation of the costs basis for each cohort is nuanced and different,” Glassnode notes.