The monthly demand for Bitcoin has soared from 40,000 BTC at the beginning of 2024 to 213,000 BTC at the time of writing, according to blockchain data analytics company CryptoQuant’s report on the astonishing growth in Bitcoin demand.
Bitcoin is experiencing unprecedented demand growth and seller liquidity tightness. As demand surges, Bitcoin liquidity reserves have dropped to historically low levels, indicating a potential seller liquidity crisis in the coming months.
BTC demand has increased by over 400%. After reaching a new all-time high of $73,000 this month, Bitcoin has continued to fluctuate at around $70,000. CryptoQuant’s report this week revealed the astonishing growth in Bitcoin demand. The data shows that monthly demand has skyrocketed from 40,000 BTC at the beginning of 2024 to 213,000 BTC at the time of writing, representing a growth rate of 432%. Additionally, CryptoQuant measures this demand by analyzing the growth of the total balance of accumulated addresses (addresses specifically used to receive and hold BTC) over a 30-day period. It is worth noting that these addresses hold more than 10 BTC, have no outflows, and have remained active over the past seven years, not belonging to any centralized exchange or mining pool.
CryptoQuant states that Bitcoin demand has witnessed an unprecedented leap as large holders, such as the US Bitcoin spot ETF and whales, actively enter the market. Currently, Bitcoin’s annual demand growth rate has reached its highest level in history, with market dynamics of “supply-demand imbalance” shaping the market’s direction.
One of the main factors driving demand growth is the influx of whale investors. The holdings of whales have increased dramatically from 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 stark contrast to the demand growth, seller liquidity is experiencing a continuous decline. Currently, the amount of BTC in seller liquidity is approximately 2.7 million BTC, much lower than the record 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), over-the-counter Bitcoin trading platforms, Bitcoin miners, and Bitcoin seized by the US government.
According to CryptoQuant’s analysis, the current state of Bitcoin seller liquidity inventory can only meet the demand for the next twelve months, based on the current pace of demand growth and accumulated address demand estimation. It is worth noting that this estimate only refers to the low-level range of Bitcoin demand, suggesting that the actual situation may be more severe.