3.5 million BTC in the market
Preview
Supply idle in the market
On-chain flows and extended supply assessments indicate passive market participants throughout the year. Our “Liquid tradeable BTC Proxy” has been stable at 18% since the fall of FTX and sits in line with the February 2020 levels.
Preview
On-chain flows and extended supply assessments indicate passive market participants throughout the year. Our “Liquid tradeable BTC Proxy” has been stable at 18% since the fall of FTX and sits in line with the February 2020 levels.
Overall, the flat state of flows points towards low activity in and out of the market - few BTC are currently taken off the market, while similarly few BTC are added to the market. This points towards price action in crypto primarily being driven by inside money for the past half year.
The contrast between our supply proxy and exchange balances is massive, with exchange balances currently sitting at 11.8% of the circulating supply, on par with February 2018 levels. We introduced our tradeable supply proxy in April 2022, aiming to highlight BTC’s changing market structure and the limitations of pure spot-based analysis. The underlying data and considerations is discussed at length in this report.
Currently, 3.5 million BTC are held by exchanges or various kinds of investment vehicles, tokenized or through traditional brokers. Exchange balances currently sit at multi-year lows of 2.28 million BTC, in isolation suggesting that the market liquidity is relatively tight, increasing the odds of sharper volatility once momentum reignites. Nonetheless, as we have highlighted on multiple occasions, investment vehicle supply should also be accounted for when monitoring macro liquidity. If U.S. ETFs get approved, we expect a further increase in investment vehicles' market share and relevancy in BTC’s price discovery.
