Bitcoin Supply Tightens as Demand Outpaces Miner Issuance by 5900 BTC Monthly

Bitcoin's supply is experiencing a significant tightening as a diverse range of investors are acquiring the cryptocurrency at an unprecedented rate. According to Glassnode, a leading crypto analytics firm, the demand for Bitcoin is outpacing the new supply issued by miners. Wallets holding less than 100 Bitcoin are accumulating the cryptocurrency at a rate of 19,300 BTC per month, while miner issuance stands at 13,400 BTC per month. This persistent net absorption by a wide base of holders is creating measurable supply-side tightening.

Glassnode also noted that long-term holders, defined as entities that have held their coins for at least 155 days, are absorbing Bitcoin at a rate significantly larger than the monthly issuance. This absorption by long-term holders is contributing to the supply constraints, as they are buying more BTC than miners are issuing. The firm emphasized that while the meme "BTC balance on exchanges dropping = supply shock" is not accurate, there are indeed supply constraints due to the absorption by long-term holders.

Despite Bitcoin reaching new all-time high prices, the bull market for the cryptocurrency remains robust. Glassnode's data shows that the long-term holder net unrealized profit and loss (NUPL), an on-chain metric that tracks whether long-term holders are in profit or loss, remains below historical peak levels. This suggests that investors who bought at least six months ago are still holding and have not yet begun aggressively taking profits. The long-term NUPL is currently at 0.69, indicating that the market has seen just 30 days above the 0.75 threshold in this cycle, compared to 228 days in the previous cycle.

The tightening supply and strong demand from a wide base of investors, including long-term holders, are contributing to the bullish sentiment surrounding Bitcoin. The cryptocurrency's price is currently trading at $122,250, reflecting the market's confidence in its long-term prospects. The persistent absorption of Bitcoin by a broad spectrum of investors and the supply constraints created by long-term holders are likely to continue driving the cryptocurrency's price higher in the coming months.