In a recent tweet thread by CryptoQuant, an intriguing revelation has emerged regarding Bitcoin’s inflows and supply. The data shows that the number of addresses logging inflows, which can be inferred as selling, has experienced an unprecedented decline of 80% over a staggering 612 days and counting.
This decline, measured from October 2021, becomes even more striking when measured from the May 2021 peak, reaching a significant 84% drop.
These figures narrowly surpass the second-highest decline in addresses associated with inflows observed during the 2017 parabolic peak transitioning into the bear market of 2018, which stood at 78.5%.
However, it is worth noting that these calculations do not take into account the number of addresses that have moved to self-custody exclusively. Furthermore, they fail to distinguish between activities conducted by miners or retail participants.
Shrinking Bitcoin Supply On Exchanges
Interestingly, despite sporadic periods of rising supply, the overall trend for BTC supply on exchanges indicates a substantial decrease. Since March 2020, Bitcoin reserves held on exchanges have plummeted by more than 30%. This decline in supply sets another record, both in terms of its duration and depth.
To put this into perspective, March 2020 witnessed the highest-ever recorded supply of Bitcoin on exchanges, following a decade of consistent supply growth. However, the subsequent 1,200 days have marked the first prolonged period of consistent decline in the history of Bitcoin.
These findings suggest a shift in the perception of BTC, one that is characterized by endurance and positivity. It is particularly noteworthy when considering recent developments such as BlackRock’s filings for Bitcoin-related exchange-traded funds (ETFs) and similar actions by other prominent institutions.
Additionally, various leading markets, notably the G20, have begun introducing regulatory frameworks to govern cryptocurrencies.
The convergence of these factors indicates a maturing and increasingly favorable outlook for Bitcoin. The diminishing inflows and supply, coupled with the growing interest from institutional investors and emerging regulations, lend credence to the notion that Bitcoin is gaining broader acceptance and recognition as a legitimate asset class.
Nevertheless, this undoubtedly fuels optimism among Bitcoin enthusiasts and highlights the ongoing evolution of the cryptocurrency landscape.
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