Report Reveals Renewed Interest in Bitcoin From US ETFs
Glassnode’s report highlights concerning scarcity of purchasable bitcoin amid high demand, potentially leading to increased price volatility.
In a recent report published by blockchain analytics company Glassnode, an in-depth analysis of the actual availability of bitcoin for purchase has been conducted, revealing a concerning scarcity in the market. As the popularity and demand for cryptocurrencies continue to soar, market experts raise a red flag about the potential implications this scarcity might have.
Realized volatility for #Bitcoin has collapsed to historical lows.
Across 1-month to 1yr timeframes, this is the quietest we have seen the corn since after March 2020.
Historically, such low volatility aligns with the post-bear-market hangover periods (re-accumulation phase). pic.twitter.com/wilcPgbTSR
— _Checkɱate 🔑⚡🌋☢️🛢️ (@_Checkmatey_) August 7, 2023
According to Glassnode’s findings, the limited supply of bitcoin ready for purchase highlights a significant challenge for prospective investors and traders. The report sheds light on the dual aspects of this scarcity: both the current amount of bitcoin in circulation and the portion of it held by long-term holders who show no intention of selling.
This detailed examination emphasizes that while the total supply of bitcoin stands at 21 million coins, a substantial portion is already held by long-term investors as a store of value or for speculative purposes. As a result, the effective supply available for purchase, or what the report terms as “liquid supply,” is far lower than the total.
Experts express concern that this growing scarcity of bitcoin in the market could have profound implications for traders and investors seeking to acquire the cryptocurrency. With limited supply and increasing demand, the potential for price volatility and pronounced market fluctuations intensifies. Higher market volatility typically presents challenges for traders aiming to make timely and profitable transactions.
Additionally, the report highlights that the amount of bitcoin held by long-term investors suggests a strong belief in the potential long-term value of the cryptocurrency. This conviction is reflected in the decreasing willingness of long-term holders to sell their holdings, further reducing the available bitcoin supply.
Glassnode’s analysis underscores the significance of supply dynamics for cryptocurrencies and their potential impact on market trends. Investors and traders should be cautious when making investment decisions, considering the limited availability of bitcoin and its potential consequences.
The report also emphasizes the need for vigilance and continuous monitoring of market conditions. As the demand for bitcoin continues to surge, investors must closely monitor supply dynamics to anticipate market trends and adjust their investment strategies accordingly.
The scarcity of available bitcoin for purchase could potentially lead to a further increase in its value, making it an attractive investment option for those willing to take on the associated risks. However, experts advise potential investors to thoroughly assess market conditions and their risk tolerance before entering the highly volatile cryptocurrency market.
In conclusion, Glassnode’s report undoubtedly highlights the limited availability of bitcoin and raises concerns regarding its potential impact on market dynamics. As the demand for cryptocurrencies surges, investors and traders should exercise caution and proactively adapt their strategies to account for the scarcity and potential price volatility.
- Glassnode report reveals alarming scarcity of available bitcoin for purchase, raising concerns amid growing demand.
- Limited supply and strong belief of long-term holders contribute to reduced “liquid supply.”
- Experts worry scarcity could lead to heightened price volatility and market fluctuations.
- Investors urged to monitor supply dynamics, exercise caution, and assess risks in volatile cryptocurrency market.