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CryptoQuant Says Bitcoin Demand is ‘Eating’ Available Inventory, Here’s How
A sharp increase in demand has led to a severe contraction of available inventory, as indicated by data from market intelligence firm CryptoQuant. According to their findings, the monthly growth rate of apparent demand for Bitcoin has accelerated significantly since late September and now stands at an unprecedented 228,000 BTC.
Simultaneously, the total amount of Bitcoin readily available for sale across crypto exchanges, over-the-counter (OTC) desks, miners, and Grayscale Bitcoin Trust (GBTC) has plummeted to levels not seen since October 2020. The data underscores a stark reality: demand is outpacing supply at an alarming rate.
Bitcoin’s apparent demand growth has resulted in a notable imbalance in the market, as witnessed by the rapid decline of available inventory held by OTC desks. These institutions typically source Bitcoin for institutional investors and large buyers. Consequently, if demand continues to rise unrelentingly while supply dwindles, it is only logical that their balances would diminish.
The data suggests that sell-side liquidity has fallen significantly over the past year, with a current total of approximately 3.397 million BTC – a four-year low. As an added layer of complexity, this inventory ratio, which measures how many months of demand the existing supply can cover, has plummeted to 6.6 months from its initial October reading of 41 months.
CryptoQuant’s findings echo those of other market analytics firms that have observed an unprecedented surge in Bitcoin demand.
Source: cryptopotato.com
