Dormant bitcoin outside exchanges creates supply crunch

More bitcoin has remained dormant in the last ten years, leaving much less available on exchanges.

How much bitcoin do exchanges currently have?

According to the latest data by Glassnode, an on-chain analytics firm, bitcoin exchanges have progressively owned fewer BTC over the past five years. At the end of February 2023, Glassnode partnered with Will Clemente and Reflexivity Research to bring on-chain market intelligence to digital asset investors. 

Glassnode announced this partnership in a tweet.

Subsequently, Will Clemente, the co-founder of Reflexivity Research, tweeted his sentiments.

He further noted the low balance on the exchanges, indicating that they now hold less BTC than most digital wallets.

Will’s tweet provokes online reactions

Following Clemente’s tweet, some people responded. Notably, a user named Willy Woo agreed with Clemente, stating that 2.6 million coins hadn’t moved in 10 years. He also stated that investors had lost an estimated 3.7 million coins, as reported by the chainanalysis study of 2020.

Woo signed off by saying that this number would rise by 2030. 

In another tweet, a user named johntech defended BTC stating that it is still a new global financial system. He compared BTC’s growth and evolution to the construction of the cathedrals in Europe, which took 150 years. Similarly, BTC will take time before its operations are seamless. 

Another tweet from HODL&13, presumably a bitcoin hodler, bragged that BTC held for 10+ years has never gone down. 

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BTC HODLer net position change chart. Source; Glassnode

According to statistics by Glassnode, bitcoin hodlers are optimistic as major bitcoin exchanges face a downturn in BTC balances.

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