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Illiquid Bitcoin Supply Reaches Historic High, Majority Stored in Cold Storage

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On April 6th, according to Glassnode\’s latest data, the illiquid supply of Bitcoin has reached 15.056 million units, setting a historic high, accounting for approximately 78% of th

Illiquid Bitcoin Supply Reaches Historic High, Majority Stored in Cold Storage

On April 6th, according to Glassnode’s latest data, the illiquid supply of Bitcoin has reached 15.056 million units, setting a historic high, accounting for approximately 78% of the total circulation supply. Most of these Bitcoins are stored in cold storage wallets or unmanaged wallets and do not appear in circulation.

Data: Bitcoin’s non liquid supply has exceeded 15 million units, setting a new historical high

Outline

I. Introduction
– Explanation of illiquid supply and why it’s important
– Brief overview of data from Glassnode
II. What is the illiquid supply of Bitcoin?
– Definition of illiquid supply and how it differs from liquid supply
– Factors that contribute to illiquidity
– Significance of tracking the illiquid supply
III. Historical trend of the illiquid Bitcoin supply
– Data from previous years and comparison to current levels
– Explanation of why the illiquid supply is growing
IV. Where are these illiquid Bitcoins stored?
– Explanation of cold storage and unmanaged wallets
– Importance of security measures for long term storage
– Risks associated with storing large amounts of Bitcoin in one place
V. Implications of the growing illiquid supply
– Impact on Bitcoin’s price and market cap
– Effect on overall supply and demand dynamics
– Potential consequences for Bitocin adoption and use as a currency
VI. Conclusion
– Recap of key points and implications
– Future outlook for Bitcoin’s illiquid supply

Article

Have you heard of the illiquid supply of Bitcoin? It’s a term that has gained increasing attention in the crypto world in recent years, and according to Glassnode’s latest data, it has just hit a historic high.
On April 6th, the illiquid supply of Bitcoin reached 15.056 million units, accounting for approximately 78% of the total circulation supply. So, what exactly is the illiquid supply, why is it important, and where are these illiquid Bitcoins stored?
Firstly, let’s define what we mean by the illiquid supply of Bitcoin. The illiquid supply refers to the number of Bitcoin that have not moved or been transacted in a specific amount of time. This differs from liquid supply, which refers to the Bitcoin that is actively circulating and available for trading.
There are a number of factors that contribute to Bitcoin’s illiquidity. One of the main reasons is that many investors are holding onto their Bitcoin for the long term, with the intention of profiting from its potential growth in value over time. Additionally, many Bitcoins are held in cold storage wallets, which are offline and very secure. This makes it difficult to move or sell these Bitcoins quickly and easily.
Keeping track of the illiquid supply of Bitcoin is important for a number of reasons. Firstly, it helps to provide a more accurate picture of the true supply and demand dynamics of Bitcoin. It also provides insight into the motivations and behaviour of Bitcoin holders, which can be useful for predicting future patterns and trends.
When we look at historical data, we can see that the illiquid supply of Bitcoin has been steadily growing over time. In fact, Glassnode’s data shows that the illiquid supply has been increasing consistently since 2017. This trend suggests that more and more investors are holding onto their Bitcoin for longer periods of time, and that the overall Bitcoin ecosystem is becoming more focused on long-term investment and storage.
So where are these illiquid Bitcoins stored? A large majority of them are held in cold storage wallets or unmanaged wallets. Cold storage is a method of offline storage that is considered to be one of the safest ways to store large amounts of Bitcoin for long periods of time. However, it does come with some risks, such as the potential for hardware failure or loss of access to your Bitcoin. Unmanaged wallets are also a popular way to store Bitcoin, but they come with their own set of risks, such as the potential for hacking or theft.
The growing illiquid supply of Bitcoin has several implications for the wider Bitcoin ecosystem. Firstly, it can have an impact on the price and market cap of Bitcoin. This is because an increase in illiquid supply means that there is less Bitcoin available for trading, which can drive up the price for the remaining supply.
Additionally, the growing illiquid supply could have wider implications for the adoption and use of Bitcoin as a currency. One potential concern is that with so many Bitcoins being held in cold storage, there may not be enough Bitcoin available for transactions and everyday use. This could hinder Bitcoin’s growth and adoption as a practical currency over the long term.
In conclusion, the illiquid supply of Bitcoin is a growing trend that is worth paying attention to. It provides valuable insights into the behaviour and motivations of Bitcoin holders, as well as the supply and demand dynamics of the wider Bitcoin ecosystem. While the growing illiquid supply does come with some potential risks and concerns, it is also an indicator of Bitcoin’s continued strength and growth as a long-term investment asset.

FAQs

1. Why is it important to track the illiquid supply of Bitcoin?
Tracking the illiquid supply of Bitcoin is important because it helps to provide a more accurate picture of the true supply and demand dynamics of Bitcoin. It also provides insight into the motivations and behaviour of Bitcoin holders, which can be useful for predicting future patterns and trends.
2. What is cold storage?
Cold storage is a method of offline storage that is considered to be one of the safest ways to store large amounts of Bitcoin for long periods of time. It involves storing the private keys to your Bitcoin in a secure offline environment, such as a hardware wallet or paper wallet.
3. Is it risky to store large amounts of Bitcoin in cold storage?
While cold storage is generally considered to be one of the safest ways to store large amounts of Bitcoin, it does come with some risks, such as the potential for hardware failure or loss of access to your Bitcoin. It is important to take appropriate security measures and backup your private keys in case of any unforeseen issues.

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