Bitcoin supply hits record low ahead of fourth halving

As the cryptocurrency market anticipates the fourth Bitcoin halving in about 157 days, a significant tightening of Bitcoin’s available supply has been reported by Glassnode. The analytics firm’s latest findings reveal that the ‘supply storage’ rates are currently 2.4 times greater than the rate of new Bitcoin issuance, indicating a historic low in the ‘available supply’ of the digital asset.

The Glassnode report breaks down the Bitcoin market into three distinct phases:

• The ‘Available and Active’ Supply phase focuses on Bitcoins that are actively circulating for trade. Notably, the Short-Term Holder Supply has reached a multi-year low at 2.33 million BTC. Additionally, metrics such as coins less than a month old, totaling 1.39 million BTC, and Futures Open Interest at 0.41 million BTC, highlight the exposure of Bitcoin in derivative markets.

• The ‘Supply Storage and Saving’ rates phase captures the transition of coins from exchanges to more secure storage solutions such as cold wallets and accounts of long-term investors. This shift is underscored by a unique accumulation pattern beginning in February 2022, where entities holding less than 100 BTC have consistently acquired more Bitcoins than what is being newly issued.

• The third phase utilizes Realized Cap to gauge the effect of capital flows on market valuation. This approach reveals the tightness in Bitcoin’s supply and liquidity by assessing capital inflows, outflows, and asset rotation within the market.

In light of these developments, trading expert Plan B suggests that active trading during halving cycles could potentially result in substantial gains. Historical data indicates that most Bitcoin price surges have occurred around past halving events, with Plan B estimating possible trader returns of up to 2,500%.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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