Glassnode CTO Cites How Bitcoin’s Diminishing Supply Could Be Beneficial for It

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The CTO of Glassnode, Rafael Schultze-Kraft, has highlighted several Bitcoin (BTC) statistics, metrics, and recent developments that indicate an ongoing supply and liquidity crisis in the cryptocurrency.

He pointed out that the well-known maximum supply of Bitcoin, which stands at 21 million, is smaller than popularly believed. He noted that about 3 million Bitcoins (16%of the total supply) are lost–most likely permanently.

Schultze-Kraft also reviewed Bitcoin’s “accumulation addresses“ which is said to hold about 2.7 million coins. Accumulation addresses are wallets that have only received BTC but have never spent or transferred any. This group, which he calls “true Hodlers” accounts for 14.5% of all Bitcoin.

Meanwhile, the number of Bitcoins stored on exchanges is reported to have dropped by 20% since the beginning of the year. The CTO dubbed this the “longest depletion of exchange funds” as investors reportedly move their holdings to long-term storage platforms. This means that liquidity and supply have been diminished significantly in 2020.

Furthermore, it also got reported that miners are holding off selling their BTC rewards, as the current miner balance stands at 1.7 million Bitcoins, 8.1% of all BTC.

Finally, Schultze-Kraft highlighted the recent mass adoption of Bitcoin by institutional investors over the past few months, adding that more corporate investors are yet to follow.

The CTO noted that these factors, while highly underrated, are very bullish for the benchmark cryptocurrency. He mentioned that the effects of this supply-thinning will be seen in the coming months.

Key BTC Levels to Watch — December 22

Bitcoin bulls have managed to keep bears at bay as the cryptocurrency regains its footing above $23k. Following a dip to the $22,380 level (the base of our pivot zone), the benchmark cryptocurrency received bullish support that shot it up to the $23,600 area.

Despite several attempts by bears to take the cryptocurrency lower, BTC has refused to break below the $23,275 level (the top of our pivot zone) over the past 24 hours.

Meanwhile, our key resistance levels are at $23,650, $23,781, and $24,000. While our key support levels are at $23,275, $23,000 and $22,7800.

Total market capital: $652 billion

Bitcoin market capital: $435 billion

Bitcoin dominance: 66.7%

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