The price of BTC has more than doubled since the third halving of Bitcoin’s block reward in May. Or to be more precise, BTC has gained 110% since the halving, with prices up from $ 8,566 on May 11, 2020 to test $ 18,000 at the time of writing.
According to a November 19 report From crypto analytics firm Chainalysis, liquidity levels and exchange flows have changed drastically since the halving.
The company identifies illiquid or investor-held Bitcoin as “wallets that send less than 25% of the Bitcoin they ever received,” while the remaining wallets are classified as liquid Bitcoin, or merchant-owned Bitcoin.
Chainalysis’s data shows that the amount of Bitcoin available to new investors started to decline early this year, while illiquid BTC rose sharply. Chainalysis estimates that the number of Bitcoin currently in liquidity could be as low as 3.4 million.
The company attributes the diminishing supply of liquid Bitcoin to the large-scale accumulation of institutional investors in 2020:
“From leading investors such as hedge fund manager Paul Tudor Jones, who compared buying Bitcoin to early investing in Apple or Google, with companies such as Square, which has invested $ 50 million or 1% of its total assets in Bitcoin, mainstream businesses and financial institutions are turning to Bitcoin. ”
Cryptocurrency fund manager Grayscale Bitcoin Trust, which now represents more than a dozen of leading institutional investors owns more than 500,000 BTC – of which 50% has been built up in the past six months.
Yesterday, analysis platform Glassnode Studio reported that Bitcoin mining sales were back to pre-halving levels. The day before, miners earned a record $ 21.2 million in daily revenue to date, about three times the profit immediately after the halving.
Before Bitcoin Maxis gets too excited, however, it’s worth noting that the price of Ether has significantly outperformed Bitcoin over the same period, growing over 160%, from $ 185 to $ 482 since May 11.