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Because Bitcoin addresses are public and transparent, and many exchanges, institutions, and individuals often know who the address belongs to because of personal or institutional disclosure or "guessing" by people. In fact, many times when you observe the changes in the amount of Bitcoin in different Bitcoin addresses, it can actually reveal some information and allow you to see some "secrets" or trends that are not visible on the surface, which is very interesting. However, this requires someone to explore and summarize it. Just yesterday, a blogger on Twitter did this, so I will use his chart to talk to you about the changes in the number of addresses and the changes and overall trends in the Bitcoin world that we can see from it. The story begins with the new CX method that has recently become popular: "Bitcoin Supply and Liquidity Crisis". In fact, this so-called crisis can be simply put as "all the coins have been bought out, and you won't be able to buy them if you don't buy them again." It can indeed be called a crisis, but it is not that exaggerated. However, the trend is indeed very obvious, let’s briefly sort it out. Among all the address data, the most striking is the strong negative correlation between the decline in exchange balance and the trend of coin prices: On the right side of this graph, there is a huge turning point in the number of bitcoins in exchange addresses. It was also on March 12 that everything began to change. The fewer coins there are on the exchange and the more coins are hoarded, the better the price trend will obviously be. This is a major trend change that has hardly ever happened before, and people are obviously happy to see such a change because the price of the currency has obviously improved. Correspondingly, the number of coins in HODL addresses is increasing. 2. HODL is like a Pixiu, it only goes in but never out Not all addresses with “only inflow but no outflow” are HODL addresses, but those with only inflow but no outflow are definitely excellent HODL addresses, as the amount of bitcoins lying on their addresses is increasing. 14.5% of the coins are hidden in safes by HODLers, and this number is increasing. 3. How much Bitcoin has been “lost”? As we all know, because Bitcoin was so cheap in the early days, many people did not take it seriously, and mistakes such as losing private keys were common. There has always been a saying that "millions of Bitcoins have been lost forever." How much is it exactly? It is indeed difficult to say, but we can roughly estimate it to be more than three million. 16% of Bitcoin is permanently locked. 4. Are miners really shipping all the time? Many people have always had the impression that miners have been "selling" and are the main selling pressure in the market. And whenever such reports appear, retail investors are always very scared: But in fact, judging from the data, miners don’t seem to want to sell coins this year. It can be seen that miners should still prefer to hoard coins, and the better the market, the more they hoard. I think the reason may be that when the market is good, just selling a little bit of coins is enough to pay the electricity bill, while when the market is bad, they have to sell a lot of coins to make ends meet. Currently, the miners’ profits are extremely good, and as the phenomenon of “power shortage and mining machine shortage” becomes more and more serious in the country, we believe that as the price of Bitcoin rises, miners will sell fewer and fewer coins and hoard more and more coins. 5. What is the actual circulation amount of Bitcoin? The last point, which is also the one that everyone is more concerned about, is that there are a lot of Bitcoins hoarded here and there, so how many Bitcoins are actually circulating in the market? In fact, only 12% of all Bitcoins are in circulation. In fact, the address data is consistent with our understanding that most of the bitcoins are actually lying quietly in cold wallets, and only a few are traded, used, pledged, etc. In other words, it is these 12% of Bitcoin that determines the price of Bitcoin. This is why foreigners are beginning to say that Bitcoin has a "liquidity crisis", because if this trend continues, the circulating Bitcoin will soon drop to less than 10%, and there will really be a "currency shortage" in the market. This is a monetary phenomenon, but I think Bitcoin is not a currency at present, so there should not be a so-called liquidity crisis. The fewer bitcoins available for trading, the higher the price will be. This logic is actually very reasonable. When you change your understanding of the circulation of Bitcoin to "only two million", you will find out what it means to this market when foreigners openly buy thousands, tens of thousands or even hundreds of thousands of Bitcoins. Finally, I believe that when we see that the actual circulation of Bitcoin is less than 10% of the total, that is, less than 2 million (a total of 1,800+ have been mined so far), we may see a "so-called liquidity crisis" of Bitcoin in which "quantitative change leads to qualitative change." |
