Bitcoin Supply Is Running Out: What Does This Mean For Crypto Markets?

Bittime - Learn what the current supply of Bitcoin is and how the distribution and amount of BTC in circulation affects the overall crypto market.

Bitcoin is one of the most popular crypto assets in the world, with a limited total supply and constantly changing distribution. One of the most frequently asked questions from investors and market observers is: What is the current Bitcoin supply? 

This article will answer this question, discuss the amount of Bitcoin in circulation, and explain its impact on the crypto market as a whole.

What is the Current Bitcoin Supply?

Currently, the circulating supply of Bitcoin stands at around 19.75 million BTC. This figure is close to the maximum Bitcoin supply limit, namely 21 million BTC, which was set since the creation of this crypto asset in 2009 by a person or group of people under the pseudonym Satoshi Nakamoto.

Bitcoin has a unique deflation mechanism, namely by reducing the number of Bitcoins produced every 4 years through a process known as halving. Every time a halving occurs, the reward for miners who successfully verify a block of transactions on the Bitcoin blockchain is halved. This process continues until all Bitcoins are mined, estimated to be around 2140.

According to the latest data from ETC Group, 74% of the circulating Bitcoin supply is currently held by illiquid entities, which is around 14.61 million BTC. Illiquid entities are wallets or addresses that hold large amounts of Bitcoin but rarely trade them. In other words, these Bitcoins are "frozen" in the wallet and are not actively circulating in the market.

This phenomenon has a significant impact on the Bitcoin ecosystem. With most Bitcoin held in illiquid wallets, there is little BTC available to trade on exchanges. This could amplify Bitcoin's scarcity in the market, especially if demand remains high or continues to increase.

The Effect of Bitcoin Supply on Prices

With fewer Bitcoins available for active trading, the effect on Bitcoin price can be quite large. Basic economic theory of supply and demand explains that when an asset is scarce but demand remains constant or increases, prices tend to rise. This explains why Bitcoin prices often rise when the number of Bitcoins available for trading decreases.

For example, when illiquid entities continue to hold large amounts of Bitcoin, there is little BTC available in the market for short-term trading. If demand for Bitcoin increases in the future, this scarcity could potentially push the price to even higher levels.

Long Term Implications of Bitcoin Supply

The existence of illiquid entities holding a large share of Bitcoin's supply could also have some long-term implications. One of them is reduced volatility in the market. The more Bitcoin that is not actively traded, the less chance there is of a major sell-off that could cause the price to drop drastically.

However, this can also be a double-edged sword. When illiquid Bitcoin is finally released into the market, such large amounts can trigger significant price movements, either upward or downward, depending on market conditions at the time.

Additionally, the more Bitcoin held by illiquid entities, the more sensitive the market will be to large movements when large amounts of BTC are suddenly traded. This is because the active supply of Bitcoin on exchanges will be very small, so changes in demand or supply can cause high volatility.

The Future of Bitcoin Supply

Bitcoin's future is heavily influenced by its limited supply mechanism. With only 21 million BTC to mine, Bitcoin is designed as a rare asset, similar to gold. As there are fewer and fewer Bitcoins available to mine, the number of Bitcoin purchases could continue to rise, especially if global adoption of this crypto asset increases.

However, it is important to remember that the Bitcoin market is also influenced by a variety of other factors, including government regulations, market sentiment, and technology adoption. Although Bitcoin supply plays an important role in determining price, these external factors can also influence Bitcoin's future volatility and value.

Conclusion

Currently, the circulating supply of Bitcoin is around 19.75 million BTC, with 74% of it held by illiquid entities. The existence of these entities has a significant impact on the Bitcoin market, reducing the active supply available for trading and potentially increasing the value of Bitcoin due to scarcity. However, with fewer Bitcoins available to mine, the future of Bitcoin prices will likely be influenced by global adoption and other market dynamics.

In answering the question “What is the supply of Bitcoin?”, it is important to understand not only the amount in circulation, but also how that distribution impacts the crypto ecosystem as a whole.

How to Buy Crypto on Bittime

You can buy and sell crypto assets easily and safely via Bittime. Bittime is one of Indonesia's best crypto applications, officially registered with Bappebti. 

To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also ensure you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. Study Complete Guide How to Buy Crypto on Bittime. 

Monitor graphic movement of Bitcoin (BTC) price, Ethereum (ETH), Solana (SOL), and other cryptos to find out today's crypto market trends in real-time on Bittime.