Analysts believe that as Bitcoin is pushed to a record high, Bitcoin is in a crisis of tightening liquidity. Although some of the recent rebounds were mainly driven by derivatives buyers, it is clear that a large amount of BTC has accumulated through spot exchanges.
Glassnode’s CTO Rafael Schultze Kraft shared the following table on December 21, which shows the price of BTC and the supply of bitcoin on the exchange in the macro time frame .
It can be seen that since the high point during the rebound in February this year reached $10,500, the number of bitcoins on the exchange has been falling sharply. Schultze Kraft and others believe that this indicates that Bitcoin is in a liquidity crisis with reduced supply, which will push up prices over time.
Schultze stated, “ Bitcoin is in a liquidity crisis with reduced supply, which is very bullish and may even be undervalued. I believe we will see this in the price of Bitcoin in the next few months. Let’s take a look at the detailed data.”
So, why does this happen?
Some evidence suggests that the reason for the decline in Bitcoin storage on exchanges is the increase in institutional participants.
And just this Monday, the US listed commercial software giant MicroStrategy announced that it has purchased 29646 bitcoins again, with an average unit price of 21,925 US dollars and a total value of more than 650 million US dollars. According to previous purchase data, MicroStrategy currently holds 70,470 bitcoins, with a total price of 1.125 billion US dollars, and an average unit price of 15,964 US dollars.
MicroStrategy CEO Michael J. Saylor said, “The purchase of more bitcoins announced today confirms our belief that bitcoin, as the most widely used cryptocurrency in the world, is a reliable store of value . We I believe that the active management of the balance sheet, coupled with the improvement of the company’s revenue and profitability, are important factors in the recent stock price rise.”
It can be said that the CEO of MicroStrategy is one of the strongest advocates of Bitcoin. He even invited Elon Musk to convert U.S. dollars into Bitcoin when he became interested in Bitcoin . In addition, MicroStrategy also announced this month that it has raised more than $600 million through the issuance of bonds to buy more bitcoins.
As we all know, MicroStrategy is just one of many corporate and institutional customers who purchase the leading cryptocurrency BTC.
Just a week ago, American life insurance company MassMutual confirmed that it had also purchased Bitcoin worth more than 100 million US dollars, and the company has other insurance companies to join the ranks, but did not disclose the names of these companies.
The original text comes from bitcoinist, compiled by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
