Hold onto your hats, folks, because Bitcoin is on a wild ride! Demand for the king of crypto is skyrocketing at a pace we haven't seen all year, while the stash of Bitcoin up for grabs is shrinking to levels not glimpsed since 2020.
Picture this: We're cruising through a bull market, and as we move along, the Bitcoin that can be bought is disappearing faster than you can say “blockchain.” A deep dive by the crypto sleuths at CryptoQuant uncovers a juicy tidbit—Bitcoin is in the middle of a demand shock. With demand revving up and supply taking a nosedive, things are heating up!
Since late September, demand has been zooming at a jaw-dropping rate of 228,000 BTC per month. Meanwhile, the Bitcoin sitting pretty and waiting to be snapped up on exchanges is drying up to levels unseen since October 2020. Investors with diamond hands, who buy and never sell, are hoarding Bitcoin at a record rate of 495,000 BTC each month. Talk about commitment!
The inventory at over-the-counter (OTC) desks—where institutional bigwigs and major buyers get their crypto fix—has seen a dramatic drop, plunging by 26,000 BTC this year. Their balance took an extra hit of 40,000 BTC since November 20. CryptoQuant spills the beans: when demand outstrips supply, OTC desks' balances take a nosedive.
And if you're wondering about the liquidity splash, it's pouring in! The market cap for USD-based stablecoins has breached the $200 billion mark for the first time. That's a whopping 20% or $35 billion surge since late October. This flood of fresh cash coincides with Bitcoin's triumphant march past the $100,000 mark, peaking at $108,000. As we speak, Bitcoin is dancing around $96,700.
On the liquidity front, Bitcoin sell-side liquidity is hanging out at 3.397 million BTC—its lowest in over four years. This year alone, it's shrunk by 678,000 BTC, putting a damper on selling pressure. The liquidity inventory ratio, showing how long current inventory can meet demand, has plummeted from 41 months to just 6.6 months since October. CryptoQuant highlights that this dip in sell-side inventory ratio has coincided with Bitcoin's thrilling rallies in the first and fourth quarters of 2024.
So, buckle up and stay tuned as Bitcoin continues its electrifying journey through the crypto cosmos!
