Chainalysis report: Currently only 19% of Bitcoin’s liquidity is used for trading

New research from Chainalysis shows that most of the circulating supply of Bitcoin is held by investors for a long time.

The latest report of blockchain analysis company Chainalysis shows that only about 19% of all bitcoins mined so far are being traded by traders. The company also said that about 20% of bitcoin is still missing (not to mention the bitcoin collection of up to six or seven digits by Satoshi Nakamoto, the anonymous creator of bitcoin).

But as for the remaining circulating supply, about 60% is held by Bitcoin’s various market participants for a long time.

In addition, the report states that these “entities (whether individuals or businesses) have never sold more than 25% of the bitcoins they received, and often hold these bitcoins for many years”.

Of the 3.5 million bitcoins used for active transactions, 96% come from so-called retail investors (usually, “retail” traders refer to any market participants unrelated to financial institutions, but in Chainalysis’ report, “ “Retail account” refers to an entity that does not exceed US$10,000 per transaction). Therefore, since 2018, large amounts of funds (more than $625,000) flowing into the bitcoin exchange each week have increased rapidly.

Chainalysis compares “retail” traders with professional traders (including institutional investors, but not necessarily excluding retail whales who trade independently of institutions). Of the 340,000 active bitcoin traders per week clearly defined in Chainalysis’s data, 4% of professional traders/entities (approximately 14,200) account for 85% of the “value of bitcoin dollars sent to the exchange.”

The analysis company said: “Because of this, professional traders are the most important factor contributing to large market volatility, such as the traders during the North American COVID-19 crisis in March that led to a sharp decline in Bitcoin prices. However, the number of professional traders Rarely, in 2020, “an average of about 39,000 transactions per week” will transfer 85% of the value.


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