tl;dr
Bitcoin is facing a severe liquidity crisis as demand for the digital currency skyrockets to unprecedented levels, with monthly demand surging from 40,000 BTC to 213,000 BTC. This is attributed to the growing total balance of accumulation addresses and significant contributions from Bitcoin exchange...
Bitcoin is facing a severe liquidity crisis as demand for the digital currency skyrockets to unprecedented levels, with monthly demand surging from 40,000 BTC to 213,000 BTC. This is attributed to the growing total balance of accumulation addresses and significant contributions from Bitcoin exchange-traded funds (ETFs) in the US. The appetite for Bitcoin among large holders, or “whales,” is also increasing, while the sell-side liquidity of Bitcoin is decreasing. This imbalance has led to a historic low in the liquid inventory of Bitcoin, signaling a bullish future for the price of the cryptocurrency.
According to analysts at CryptoQuant, monthly demand has rocketed from 40,000 BTC at the outset of the year to a staggering 213,000 BTC presently. This surge is attributed to the growing total balance of accumulation addresses, indicating heightened investor interest in securing Bitcoin. Additionally, Bitcoin exchange-traded funds (ETFs) in the US significantly contribute to the surge in demand for BTC. These ETFs, excluding GBTC, have seen their BTC balances swell dramatically. Indeed, from February 25 to March 17, their balances grew from 117,000 to 185,000 BTC, reflecting the crucial role that institutional investments through spot ETFs are playing in amplifying Bitcoin demand. Moreover, the appetite for Bitcoin among large holders, or “whales,” is also witnessing a parabolic increase, with the year-on-year growth in the total balance of Bitcoin whales reaching an all-time high of 1.57 million BTC.
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