The price of BTC has more than doubled since the Bitcoin’s third block reward halving in May. Or to be precise, BTC has gained 110% since the halving, with prices rallying from $8,566 on May 11, 2020 to test $18,000 as of this writing.
According to a Nov. 19 report from crypto analytics firm Chainalysis, levels of liquidity and exchange flows have changed dramatically since the halving.
The firm identifies illiquid, or investor-held Bitcoin, as “wallets that send less than 25% of Bitcoin they’ve ever received”, while the remaining wallets are classed as liquid Bitcoin, or trader-held Bitcoin.
Liquid Bitcoin vs. illiquid Bitcoin: Chainalysis
Chainalysis’ data shows that the number of Bitcoin available to new investors started to decline early this year, while illiquid BTC sharply increased. Chainalysis estimates that the number of Bitcoin that are currently liquid could be as low as 3.4 million.
The firm attributes the diminishing supply of liquid Bitcoin to wholesale accumulation from institutional