Only 19% of Bitcoin’s Current Supply Is Being Traded, Chainalysis Reports
Blockchain analytics firm Chainalysis has published a report saying only 3.5 million bitcoins, around 19% of the flagship cryptocurrency’s circulating supply, are used for trading. Per the report, out of the nearly 18.6 million BTC mined as of June 2020, the majority are being held long-term.
The firm found that roughly 60% of bitcoin’s current supply is held by entities that never sold more than 25% of the cryptocurrency they have ever received, and categorized these coins as being “held for long-term investment.”
Some of Bitcoin’s current supply, 20%, has not moved in five years or more, and Chainalysis called these as “lost Bitcoin.” The remaining fraction is used for trading and helps determine the price of the cryptocurrency. Around 340,000 people, throughout 2020, were trading BTC on a weekly basis, it found.
Out of these 340,000 traders, there are retail traders – considered those who deposit bitcoin worth less than $10,000 at a time – and professional traders. Retail transactions account for 96% of transactions made to exchanges, Chainalysis added.
Per Chainalysis, the bitcoin being held for long-term investment could end up being an important source of liquidity in the market.
