The monthly demand for Bitcoin has skyrocketed from 40,000 BTC at the beginning of 2024 to 213,000 BTC at the time of writing, according to blockchain data analysis company CryptoQuant in a recent report. The astonishing growth in Bitcoin demand is due to unprecedented increases in demand and seller liquidity tightness. As demand soars, Bitcoin liquidity reserves have dropped to an all-time low, indicating a potential seller liquidity crisis in the coming months.
BTC demand has surged over 400%. After reaching a historical high of $73,000 this month, Bitcoin has continued to fluctuate at around $70,000. CryptoQuant, a blockchain data analysis company, revealed in its report this week the astonishing growth in Bitcoin demand. Data shows that the monthly demand for Bitcoin has increased by a staggering 432% from 40,000 BTC at the beginning of 2024 to 213,000 BTC at the time of writing. CryptoQuant measures this demand by analyzing the growth of the total balance of cumulative addresses (addresses specifically for receiving and holding BTC) over a period of 30 days. It is worth noting that these addresses hold over 10 BTC, have no outflow of funds, and have remained active over the past seven years, not belonging to any centralized exchanges or mining pools.
CryptoQuant states that Bitcoin demand has witnessed an unprecedented leap as a result of the entry of major players such as the U.S. Bitcoin spot ETF and whales into the market. Currently, the annual growth rate of Bitcoin demand has reached its historical peak, and the market dynamics of “supply-demand imbalance” are driving the market trend.
The increase in whale investors is one of the main factors driving the growth in demand. As of now, the holdings of whales have increased from an astonishing 874,000 BTC at the beginning of 2024 to approximately 1.57 million BTC, indicating extreme bullishness among major investors in the market.
However, in sharp contrast to the growth in demand, seller liquidity is experiencing a continuous decline. Currently, the amount of BTC in seller liquidity is approximately 2.7 million BTC, far below the historical high of 3.5 million BTC in March 2020.
These liquidity sellers include entities with liquid assets available for investors to purchase Bitcoin, such as Bitcoin reserves of centralized exchanges (CEX), Bitcoin over-the-counter trading platforms, Bitcoin miners, and Bitcoin seized by the U.S. government.
According to CryptoQuant’s analysis, the current state of Bitcoin’s seller liquidity inventory can only meet the demand for the next twelve months, based on the current rate of demand growth and cumulative address demand. It is worth noting that this estimate only considers the lower range of Bitcoin demand, implying that the actual situation may be more severe.