The Decline of Bitcoin Inflows and Supply: A Historic Trend
On July 2, 2023, CryptoQuant, a leading on-chain analytics firm, shared a Twitter thread revealing a historic trend in Bitcoin’s market dynamics. The thread discusses the largest decline in Bitcoin inflows and supply in history.
Main Breakdowns:
- Bitcoin addresses logging inflows have declined by 80% over 612 days, starting from October 2021. If we consider data from the May 2021 top, the decline rises to 84%.
- This decline surpasses the previous record drop in addresses associated with inflows, which occurred between the 2017 parabolic top and the 2018 bear market at 78.5%.
- It’s important to note that these figures do not account for addresses that moved to self-custody or distinguish between different types of activity.
- Since March 2020, Bitcoin’s supply on exchanges has consistently declined, marking the first period of consistent decline in Bitcoin’s history.
- This shift in supply dynamics suggests a change in how Bitcoin is being held and traded.
The thread suggests that these trends indicate an enduring and positive evolution in the general perception of Bitcoin. Recent developments, such as BlackRock and other ETFs filing or re-filing, and the introduction of regulatory frameworks among leading markets, further support this notion. Retail traders and institutions are also holding more Bitcoin than ever, signaling increased confidence in its long-term value and a shift towards long-term holding.
Hot Take:
The decline in Bitcoin inflows and supply, along with increased confidence from retail traders and institutions, points to a positive future for Bitcoin. These trends indicate a shift towards long-term holding and a growing perception of Bitcoin’s value in the financial world.
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