The level of available bitcoin on crypto exchanges – liquid tokens investors can easily buy and sell – has dropped 2.3 million, its lowest reading since April 2018, Glassnode data shows. That's down from 2.6 million a year ago and 3.2 million at its peak in May 2020.
Meanwhile, there's roughly 3 million tokens that haven't been moved in ten years, said Weller. That compares to the current overall supply of 19.5 million and bitcoin's maximum-ever supply of 21 million.
"That's suggestive of a potential supply shock," Weller said. "With lower supply on the market, it only takes a small bump in demand to really drive prices higher at a rapid rate."
Weller said that spot ETFs, unlike futures-based products, could "fundamentally alter the supply and demand picture" for bitcoin, making it available for a new set of investors. That's especially so now that bitcoin has regained its "uncorrelated asset" lure by decoupling from equities and rallying as U.S. stocks have entered correction territory, he added.
"If we see just a small amount of allocation from some of those big funds on this uncorrelated or occasionally uncorrelated asset investment thesis, that could be a very bullish sign for bitcoin and the whole crypto sphere," Weller said.
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