Bitcoin's Liquidity Has Run Dry - Where Is It All Going?

21 million BTC sounds like a lot but when you start to see all the people who are buying it and add in all the people that are holding it you see why it really isn't that much. You are starting to what happens when a currency with a fix supply gets a lot of demand. The price is almost at ATHs and if this trend continues we could see Bitcoin climb to numbers unseen before.

But where is it all going?

Big Investment Firms And Investors

You might have seen the tweets from people like the CEO of Micro Strategy who have bought $250 million dollars in Bitcoin. These wealthy individuals are buying large chunks of the currency and this takes a lot of it off the market. Not only are the buys doing a lot to lower liquidity but their public tweets and posts about it encourage others to buy as well which further increases the demand for Bitcoin..

Paypal

People can now buy sell and hold Bitcoin in their paypal wallets. Paypal is also buying Bitcoin itself with large buy orders drying up liquidity. According to this article, 70% of all new Bitcoin minted in the last four weeks was bought by Paypal alone.

Wrapped Bitcoin

The more people that wrap bitcoin and put it on other chains the more bitcoin gets locked up. With defi taking over people are adding wbtc to pool in order to see a return for it. This leads to more coins off the market and yep you guessed it, less supply.

Poker?

I read this interested article that poker players are requesting their winnings in BTC. In fact it is $100 million dollars a month in Bitcoin that is being bought by a poker company in order to pay their players in Bitcoin. This means that every month Bitcoin has to be bought in order to send it to their customers and every month you have more buying pressure.

Check out this article for more information.

The Hodlers

These are just the new sources that have come up recently. You still have a large community of bitcoin holders who have been here for years and have been keeping their coins safely in their wallets.

I'm seeing more and more sources of bitcoin buyers that are popping up. When you add them all up you see that the supply of 21 million is really not that big and things are going to get interesting in the next months if this trend continues. The more bullish news is the ones like the Poker site which shows that not only is the Bitcoin bought but that it will continue to be bought. It is impossible to say if this will keep going in this direction but we all know what happens when supply dries up and demand goes through the roof.

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