Bitcoin Liquidity Crisis

[FreshKaz11]

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.

One thing about Bitcoin is that,you can never know what could happen to the price of it in the next coming month because it doesn't have a stable price value. So we should all invest safely on it.

 

[Senator]

Become cannot become liquidated at any point or for any reason. People and organizations will normally keep and hold their bitcoins for as long as they always have been doing for the simple reason of hitting their target price level before selling it off for profits.

 

[Heatman]

I keep answering the question do people still invest in Bitcoin because of how expensive the cryptocurrency is at the moment as there are so many other cryptocurrency that are affordable and they are still growing more than Bitcoin?

 

[Sotherefore]

I keep answering the question do people still invest in Bitcoin because of how expensive the cryptocurrency is at the moment as there are so many other cryptocurrency that are affordable and they are still growing more than Bitcoin?

Bitcoins will continue to increase in price no matter how long and how the price might be because it is the father of all crypto, yes I invest in bitcoins and I also invest in other potential cryptocurrency.

 

[Kelly5]

If the liquidity crises can be what is going to push the Bitcoin price upward, then this is a good news to the Bitcoin investors because it will be their earnest prayers that the prices of the Bitcoin rise than for it to fall actually don't you think so?

 

[Nomad]

Even though Bitcoin has now fallen below $30,000 from its all time highest of $64,000 in May, I believe bitcoin will gain the price value because it is has limited supply of 21 million.

 

[Heatman]

Bitcoins will continue to increase in price no matter how long and how the price might be because it is the father of all crypto, yes I invest in bitcoins and I also invest in other potential cryptocurrency.

Seriously, if every other cryptocurrencies fails, I'm definitely convinced that it would never get to the point where the cryptocurrency Bitcoin would become useless.

 

[Chibson]

bitcoin is of no doubt the very first cryptocurrency and of course a lot of people are adopting need a daily basis and making huge investments so it is definitely the future.

 

[Sotherefore]

Seriously, if every other cryptocurrencies fails, I'm definitely convinced that it would never get to the point where the cryptocurrency Bitcoin would become useless.

This will never happened ,the price of bitcoins will never drop back to $8000 last no matter what happen, bitcoins has the highest market volume and it can be very difficult before it reduce more than the current price it is now.

 

[delnovem]

Bitcoin has its issues, and price volatility is one of them. The liquidity problem is one of many factors that lead to sudden movements in the Bitcoin price. Thus, improved liquidity can help to reduce the risks of Bitcoin.

 

[Yusuf]

Bitcoin or crypto currency exchange Business is very profitable but the only thing I don't like about the business is just that it is too manipulative by the whales Investors to make money from and that it

 

[kayode10]

Bitcoin is still a good asset some can invest in at present. It will be good to buy some and keep it for a long term as the price is likely it rise at the last quarter of the year.

 

[Nurudeen]

I'm just seeing this post since it was posted. However, I think it's because of the manipulation in the crypto currency exchange Business that makes people to start liquidating their portfolio out of Bitcoin and other altcoin

 

[Kaffyfolla]

During a liquidity crunch, the prize is the USD. Cash is king. Institutions and large asset managers sell-off virtually anything necessary to remain liquid (holding USD), including bitcoin, during a liquidity crunch.

 

[Kingsley]

Bitcoin can not liquidate, it os near impossible. It will take a lot for bitcoin to liquidate as It is not been managed or controlled by a central management system, but it is been controlled by the forces of demand and supply. Hence it is impossible to liquidate.

 

[tyrim88]

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

That is actually the strategy most big wale investors usually employ to make the price of the coin they have investmet in to go high,and that will in a very short time make them to cash in on the fluctuations in the market,thats their strategy.

 

[Laurentta]

Aside the crisis, bitcoin is a very unstable coin.I wonder why old investors of bitcoin are refusing to sell their coin so bitcoin could circulate. This is not good and it's making bitcoin bullish.

 

[HayKay]

Well predictions were right at the time. A lot of people scrambled for the little amount of Bitcoin that was in circulation and this spiked up the prices greatly. But if more BTC was added to the pool that made the price reduce, I can't tell