Bitcoin Liquidity Crisis

[Suba]

Bitcoin Liquidity Crisis
Throughout 2020, more and more investors and institutions adopted Bitcoin, some of the reasons for them being because Bitcoin has a fixed amount of supply. There are also concerns that there will be inflation and an increase in central bank liquidity, so that investors and institutions adopt Bitcoin as a hedge against inflation. Glassnode's research found that only about 4.2 million BTC were in circulation and tradeable.

Bitcoin liquidity is defined as the average ratio of BTC earned and spent across all entities. According to Coinmarketcap the current Circulating Supply is 18,592,612 BTC, and illiquid Bitcoin amounts to 14.4 million BTC, so the remaining around 4.2 million BTC in constant circulation is available for trading.

More and more long-term investors are holding onto their Bitcoin, refraining from wanting to sell their asset. If old holders continue to move away from wanting to sell BTC, this dominant cryptocurrency will become rarer and harder to accumulate.

Trends like these could push the Bitcoin price higher in the long run. Triggering an ongoing bullish cycle. Meanwhile, analysts say that during 2020, a total of 1 million BTC was added to become illiquid, the more investors will decline. This is bullish, and shows that the current increase is already due to the Bitcoin liquidity crisis that occurred.

 

[Akinwale701]

When I come across a thread about bitcoin on this forum, I'm puzzled as to what exactly to say. Bitcoin, as a decentralized Crypto currency doesn't have a stable price, we can't actually say this is what will become of it in the next few months, it's true that's it's price is soaring high right now, but.....

 

[Donkiz]

Most of these new organizations that are buying bitcoins are just buying them for keeps, everyone is aware that they don't have the intention of putting their bitcoins in circulation, they just saw it as a commodity that will help to ensure that their assets does not lose value, so what they did was to purchase part of the tradable bitcoins and moved it out from circulation, thereby reducing the amount of bitcoins available for trading, hence the huge increase in bitcoin price.

 

[Lagazine]

Liquidation in Bitcoin is not visible. Organisations with great vision will always want to invest on bitcoin and keep for a while. The coin will always be the king of crypto world and will never be a lose to the investors. I have a friend who keep his 2.5BTC since 2015 till date, you can't imagine how much such a person will have now.

 

[tuna89]

Thanks for the rich content and useful information, I am currently accumulating more btc and next for me is ETH and chainlink, still reading about their analysis, this times are the best to invest in very goof amount of crypto.

 

[Sotherefore]

This is really difficult to understand by me, because I do not trade bitcoin bitcoin I only hold it for it to gain value over time because I cannot bear the stress of trading bitcoins all the time if i trade bitcoin at the end of the day I might lose my bitcoins because of liquidation as a result I do not take such risks because trading of bitcoins carry risk that i can't take.

 

[Iamsodex]

With the hash difficulty of btc increasing everyday and the decision of whales to hodl their btc to stand against devaluation of currencies, it's quite clear that there would be very little btc in circulation with increasing demand everyday and this will only result in surge in price of btc. Now is the best time to accumulate btc

 

[Goodday]

Bitcoin really have a great future considering all the actions of the various organizations and business men towards it. Because bitcoin is limited in supply and most are acquiring it for holding purpose, price will surely skyrocket very soon even though it just started.

 

[Kamon c4]

The long term investors determines the bitcoin market. Bitcoin liquidity is a very crucial thing to watch out for as its market may be affected by the whales. With 4million bitcoin available for trade that shows there’re big investors in the market and they’re hoarding the coin. The volatility of bitcoin will be determined by their bitcoin dealings.

 

[Ltherman]

Bitcoin Liquidity Crisis
Throughout 2020, more and more investors and institutions adopted Bitcoin, some of the reasons for them being because Bitcoin has a fixed amount of supply. There are also concerns that there will be inflation and an increase in central bank liquidity, so that investors and institutions adopt Bitcoin as a hedge against inflation. Glassnode's research found that only about 4.2 million BTC were in circulation and tradeable.

Bitcoin liquidity is defined as the average ratio of BTC earned and spent across all entities. According to Coinmarketcap the current Circulating Supply is 18,592,612 BTC, and illiquid Bitcoin amounts to 14.4 million BTC, so the remaining around 4.2 million BTC in constant circulation is available for trading.

More and more long-term investors are holding onto their Bitcoin, refraining from wanting to sell their asset. If old holders continue to move away from wanting to sell BTC, this dominant cryptocurrency will become rarer and harder to accumulate.

Trends like these could push the Bitcoin price higher in the long run. Triggering an ongoing bullish cycle. Meanwhile, analysts say that during 2020, a total of 1 million BTC was added to become illiquid, the more investors will decline. This is bullish, and shows that the current increase is already due to the Bitcoin liquidity crisis that occurred.

Thanks for bringing perspective to the recent bull run cos someone was asking me what's really pushing the price continuously on an uptrend. All i can say is grab what you can grab now while there is still time.

 

[Highflyer]

Bitcoin liquidity crisis' — BTC is becoming harder to buy on exchanges, data shows. Bitcoin liquidity is declining, data from Glassnode shows, which could propel BTC price even higher. Bitcoin is becoming more difficult to buy, according to analysts at Glassnode.However, Ledbetter notes, bitcoin is “way more volatile” than gold. “As long as bitcoin is going up, sure, it's a great hedge against inflation, but it can also go down, and therefore, you're losing money – you're not just not keeping pace with inflation, you're actually losing capital.”

 

[Heatman]

Seriously, I was shocked this morning when I woke up this update on bitcion and other cryptocurrencies falling in price. In one side, it's a good thing for new investors to find it easy to invest in bitcion but on the other hand, it's painful for those whom their investment seems like it's cutting their profits.

 

[Trojan8]

Buying BTC of keep sale is actually bad for bitcoin ecosystem since it's supply is fixed. Crypto were built on the foundation that they are used for easy transactions without much cost. Keeping bitcoin removes them from circulation thereby making them scarce.

 

[BrolySSJ]

As bitcoin becomes harder to come by and find, it is a great thing not only because it lowers the demand of the coin but it shows that people value it as an asset that they can see rising in the future. Therefore I think that this will cause a major increase in the price. Bitcoin has high prospects for the future and so I doubt that it will ever liquidate.

 

[Abibatabosede]

The rate at which investors put in more of their investment into bitcoin does not mean there is any problem of putting it in to circulation in the nearest future, it's just that they believe it is a way of putting there money in to more profitable use.

 

[giddy]

BTC is becoming harder to buy on exchanges, data shows.Bitcoin liquidity is declining, data from Glassnode shows, which could propel BTC price even higher. Bitcoin is becoming more difficult to buy, according to analysts at Glassnode

 

[Ralphjoe]

There is nothing like bitcoin liquidity crisis as far as I am concerned because there is no time that I cannot buy or easily sell off my bitcoin investment because it is in high demand and most people will quickly buy the cryptocurrency without even thinking twice.

 

[Heatman]

From my understanding if bitcoin does not increase or decrease in price there is no way people will keep investing in it and there is no way people will make profit from their investment so the more it goes up or go down is what helps people to earn money from it.

 

[GIFTMICHAEL]

Nice analysis, Bitcoin still has enough reserve. Not all is on circulation at the moment. When large number have been circulated or liquidated. Miners can still mine more to keep the ecosystem up smd running.

 

[Kelly5]

Liquidity or no liquidity in Bitcoin, the price will always fluctuate and will always be taken advantage of by investors heavily invested in the coin. People mostly buy this coin for keep in the long term, not Short term mostly