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.
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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.
