A recent report from Fidelity Digital Assets reveals a critical development in the Bitcoin market: the amount of Bitcoin unmoved for more than a decade surpasses newly mined Bitcoin. This signals a change in supply dynamics.
Increase in Long-term Bitcoin Holdings
As of June 8, an average of 566 bitcoins per day has surpassed the 10-year inactivity threshold, while only 450 new bitcoins are being mined daily. This trend demonstrates a strong hold among long-term investors. The Fidelity report notes that old supply is increasing at a rate of less than 3% per day. For investors holding Bitcoin for over five years, the decline rate reaches 13%, indicating solid holding patterns among seasoned investors.
Supply Constraints and Institutional Participation
Post-2024 halving, new production of Bitcoin has diminished. Ancient supply consistently outpaces new production, reducing the availability of liquid Bitcoin. This enhances investor confidence and reflects a robust holding pattern. Following the 2024 U.S. elections, there was a temporary decrease in old supply, with increased movement. Nevertheless, the overall trend of increasing old supply persists. Fidelity uses the 'ancient supply HODL rate', which has remained positive since April 2024.
Market Implications Ahead
Projections for the coming years suggest the old supply could reach 20% of the total by 2028, and 25% by 2034. If public companies holding over 1,000 bitcoins are included, this could approach 30% by 2035. As of June 8, 27 public companies own over 800,000 bitcoins, suggesting increased institutional involvement that may further limit circulating supply. While Bitcoin's capped supply is 21 million, the effectively available amount could drop to 14.7 million due to stagnant reserves and rising institutional holdings.
The data on long-term holding behaviors in Bitcoin emphasizes the significance of monitoring these changes for liquidity and price stability in the market. Analysts recommend close observation of these trends moving forward.
