Bitcoin (BTC) may have shed $10,000 in a week but the cryptocurrency’s “supply crisis” is more real than ever.
According to the latest data from on-chain monitoring resource Glassnode, exchange BTC reserves are at an all-time low.
Everyone wants BTC
In a telling depiction of investor strategy, exchange reserves have plummeted in recent months — and have continued dropping despite mixed price action.
Hodlers, it seems, want to hodl rather than trade or sell, even at all-time highs above $60,000.
At Coinbase, the largest U.S. exchange by volume, BTC stocks have crashed by nearly $8 billion at current prices, or 150,000 BTC, since January.
A favorite venue for largescale institutional buyers, Coinbase underscores persisting appetite for Bitcoin, Cointelegraph previously reporting on large tranches of BTC leaving its books for cold storage.
Coinbase BTC balance chart. Source: Bybt
“IMO what’s happening is US institutions and HNWI are scooping up the available coins from weak hands and locking it up as strong HODLers in response to monetary inflation,” statistician Willy Woo commented last week.
“Coinbase BTC supply dropping off a cliff suggests US institutional buying there.”
Woo added that these “strong” hands had been buying up the supply put on the market during every price correction over the past year, with “insanely bullish” results.
Major exchange BTC balance chart. Source: GlassnodeGBTC faces unlocking at 14% discount
For asset manager Grayscale, however, conditions remained mixed as its signature Grayscale Bitcoin Trust ($GBTC) traded at a 14% discount to spot price this week.
Near-record highs, the discount in the “GBTC premium” is likely down to liquidity unlocking for those who bought shares six months ago.
At that time, a GBTC share cost around $11.17, equating to a positive premium of around 12% over spot price. Now, even with the negative premium, a share is $44.50.
GBTC share price vs. holdings vs. premium chart. Source: Bybt
Grayscale faces stiff competition from new institutional investment vehicles, with NYDIG this week slashing fees as Morgan Stanley prepares to offer one of its funds to its own investors.