In the ever-evolving world of cryptocurrency, Bitcoin has once again made headlines with its illiquid supply hitting a record high. As of late August, the illiquid supply of Bitcoin—those coins held by entities with little history of spending—surpassed 14.3 million BTC. This figure, reported by Glassnode, highlights a significant trend in the cryptocurrency market: long-term holders continue to accumulate Bitcoin, even amidst market fluctuations.
Bitcoin’s Illiquid Supply Reaches New Heights
With Bitcoin’s illiquid supply now accounting for roughly 72% of its total circulation, which stands at 19.9 million BTC, the data suggests that a significant portion of Bitcoin is being held by investors who aren’t keen on selling anytime soon. These holders include long-term investors and those storing their coins in cold storage, reflecting a growing trend of viewing Bitcoin as a long-term store of value.
Interestingly, this accumulation has persisted despite the recent market volatility. In mid-August, Bitcoin reached an all-time high of $124,000, only to see a pullback of about 15%. Yet, even as prices dipped, the illiquid supply continued its upward trajectory, growing by an additional 20,000 BTC over the past 30 days.
A Testament to Investor Confidence
The continued rise in Bitcoin’s illiquid supply underscores the steadfast confidence of its investors. Many in the community view this as a positive sign, suggesting that these holders are undeterred by short-term market corrections. Instead, they appear focused on the long-term potential of Bitcoin as a secure and valuable asset.
This trend isn’t just about numbers; it’s about sentiment. The increase in illiquid supply indicates a tightening of supply dynamics. As more Bitcoin is held back from the market, the potential for renewed momentum grows, particularly if overall sentiment shifts positively.
Balancing Optimism and Caution
While the current data paints a picture of growing confidence, it’s crucial to consider the broader implications. On one hand, the increase in illiquid supply can be seen as a bullish indicator. If significant portions of Bitcoin are off the market, the reduced supply could potentially drive prices higher, especially if demand increases.
On the other hand, some analysts urge caution. They argue that such a concentration of Bitcoin among illiquid holders might lead to increased volatility in the future. If a large holder decides to sell, it could lead to significant market shifts. However, the current trend suggests that such scenarios may not be imminent, as many of these holders are in it for the long haul.
The Bigger Picture: Bitcoin as a Store of Value
The current trend toward accumulation and illiquidity aligns with the broader narrative of Bitcoin as a store of value, akin to “digital gold.” As inflation concerns and economic uncertainties loom, more investors are turning to Bitcoin as a hedge against traditional financial systems.
Moreover, this period of accumulation might set the stage for the next phase of Bitcoin’s journey. With supply dynamics tightening, any future shift in demand could pave the way for substantial upward movements, potentially surpassing previous all-time highs.
Looking Forward
As we navigate the complexities of the cryptocurrency market, the record high in Bitcoin’s illiquid supply serves as a reminder of the asset’s evolving role. It reflects a growing maturity in the market, where investors are increasingly viewing Bitcoin as a viable long-term investment rather than a speculative venture.
For now, the focus remains on the continued accumulation by long-term holders, a trend that speaks volumes about their confidence in Bitcoin’s future. As the landscape continues to shift, market participants will be closely watching for any signs of sentiment change that could trigger the next wave of price action.
In the meantime, the data is clear: Bitcoin’s illiquid supply hitting 14.3 million BTC is more than just a number—it’s a testament to the enduring belief in Bitcoin’s potential and its role in the future of finance.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
