Bitcoin supply dynamics are in an amazingly robust state and investors are quite happy!

Currently, for the investor community, topics like Bitcoin, Ethereum, blockchain, initial coin offerings, and other related topics have dominated their investment strategies. The phenomenon of cryptocurrencies has caused quite an uproar in the media, online forums, and perhaps even the dinner-time conversations. It is quite a known fact that Bitcoin is the most popular cryptocurrency in the market, which made headlines in 2021 as the crypto that drove the entire crypto market to new highs and essentially became the digital gold of the investor community. But one of the chief characteristics about the crypto that has got investors speculating about its availability in the future is regarding its circulating supply. Bitcoin supply dynamics have got everyone confused about its future state. But recent reports reveal Bitcoin supply dynamics are actually doing better than what was anticipated before. The amount of Bitcoin as a percentage of circulating supply has not moved in approximately over a year and is now just 1% away from the all-time high.

Investors have been watching the bullish Bitcoin supply dynamics quite closely over the last few months since it might also act as a catalyst leading to a sudden price rise of the crypto. Earlier, for almost a year, its dormant supply at similar levels dominated even the most bullish markets. But experts find it absolutely fascinating to portray how tight the supply side of the Bitcoin market is. Since the supply dynamics of the crypto have increased considerably, experts predict a rise in the illiquid supply of Bitcoin. According to reports, the illiquid supply percentage of Bitcoin's circulating supply has surpassed 2021's highest of 76.02% and has reached 76.25%. 

A Spike in the Supply Shock Ratio of Bitcoin

Another method to analyse this dynamic is through the Supply Shock Ratio, which continues to show the strength of illiquid supply growth relative to the rest of the supply. Generally, supply shock is not something that crypto investors would like, but for major cryptocurrencies like Bitcoin and Ethereum, investors can consider this supply shock phenomenon as a good thing! What is a Supply Shock Ratio?

A supply shock is an unexpected spike in the demand for an asset or a commodity that exponentially exceeds the available supply. 

A Positive Rise

The total number of Bitcoin tokens held by investors who possessed it for more than a year has crossed 1.7 million BTC. According to reports, this marks a new high. Crypto holders, especially BTC fanatics, have increased their holdings by nearly 20% since December 2021. And several others continue their moderate accumulation and/or short-term holder supply into long-term holder supply. Regardless, it indicates a positive sign to see long-term holder supply in an existing neutral to the rising macroeconomic environment.

Bottom line

Currently, the most discussed topic among Bitcoin investors is what will be the repercussions in the future if all the 21 million Bitcoins are already mined and circulated among crypto investors? It's quite unclear right now as to where crypto will head in the future, but these long-term investment sentiments indicate a bullish future for Bitcoin.