Main Points ：
- Bitcoin non-liquid (illiquid) supply has exceeded 14.3 million BTC, the highest ever recorded.
- This represents approximately 72% of the circulating supply, highlighting the dominance of long-term holders and cold storage.
- In the past 30 days alone, net illiquid supply grew by 20,000 BTC, signaling continued accumulation despite market volatility.
- After peaking at $124,000 in mid-August and dropping roughly 15%, these holders remain undeterred.
- The tightening of tradable supply creates scarcity, possibly setting the stage for renewed bullish momentum when sentiment improves.
- Additional indicators: exchange reserves have fallen to multi-year lows (~14–15%), reinforcing the narrative of a liquidity squeeze.
- Broader context includes increasing lost or dormant coins permanently locked, further reducing effective circulating supply.
1. Record Illiquid Supply and Long-Term Holding Behavior
Bitcoin’s illiquid supply—coins held by entities with little to no spending history, such as long-term holders and cold wallets—has surpassed 14.3 million BTC, a new all-time high. With approximately 19.9 million BTC currently in circulation, this means around 72% of the supply is effectively removed from market circulation.
2. Continued Accumulation Despite Volatility
In the 30 days leading up to late August, the net illiquid supply increased by 20,000 BTC, underlining investors’ conviction and resilience against price pullbacks. Mid-August’s dip from the peak price of $124,000 by roughly 15% did not deter accumulation; holders remained steadfast.
3. Implications of Supply Tightness
This sustained rise in illiquid supply tightens available liquidity—when demand returns, reduced sell-side liquidity may fuel rapid price appreciation. Binance analysts warn that falling tradable supply could lead to more extreme volatility when large demand hits an already scarce market.
4. Exchange Reserves at Multi-Year Lows
Complementing the illiquid supply trend, Bitcoin reserves on exchanges have dipped below 15% of total supply—levels not seen since August 2018—signaling reduced sell-pressure availability. OTC balances are similarly depleted, reinforcing a structural supply squeeze.
5. Lost and Dormant Coins Still Reduce Effective Supply
Beyond illiquid holders, a significant number of BTC are considered lost or permanently inaccessible—estimates range between 2.3 million and 4 million BTC. These coins, though technically part of circulating supply, are not realistically available for trading, further tightening the effective market supply
6. Additional On-Chain Trends & Structural Insights
- Earlier this year, illiquid supply climbed from 13.9 million to 14.37 million BTC, reinforcing the long-term holding trend.
- Traditional financial flows (e.g., spot ETFs) have slowed: ETF inflows for Bitcoin dropped from over 3,000 BTC/day earlier in the year to just 540 BTC/day recently. This further underscores that supply dynamics are increasingly supply-constrained rather than demand-driven.
7. Summary and Outlook
In sum, Bitcoin’s record illiquid supply, coupled with shrinking exchange reserves and dormant coin accumulation, paints a picture of tightening supply. Long-term holders are consolidating, trusting in Bitcoin’s potential as a store of value. If market sentiment rebounds or new demand arises—especially from institutional flows—the limited tradable supply may amplify upwards momentum.
