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Dormant State of Bitcoin: An Analysis of Historical Supply

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It is reported that the total supply of bitcoins older than 6 months has reached 14.993 million, close to the historical peak (ATH is 15.029 million), while th…

Dormant State of Bitcoin: An Analysis of Historical Supply

It is reported that the total supply of bitcoins older than 6 months has reached 14.993 million, close to the historical peak (ATH is 15.029 million), while the total supply of bitcoins younger than 6 months has not increased significantly since 2023, hovering around 4.298 million BTCs, which means that bitcoins older than 6 months are generally in a dormant state. In addition, Glassnode also found that only 4.123% of all the transactions sold were Bitcoin older than 6 months.

Bitcoin older than 6 months is currently in a dormant state

Interpret the above information:


Bitcoin’s supply and its dormant state have been of great interest to the cryptocurrency community. Recently, a report surfaced stating that the total supply of Bitcoins older than 6 months has reached 14.993 million, which is close to its historical peak of 15.029 million. However, the total supply of Bitcoins younger than 6 months has not seen a significant increase since 2023, hovering around 4.298 million BTCs.

This trend suggests that Bitcoins older than 6 months are mostly in a dormant state, meaning they have not been moved or spent in recent months. The reasons behind this can be attributed to several factors, including an increase in long-term holding, high transaction fees, and uncertainty in the market.

The increase in long-term holding can be due to investors’ confidence in Bitcoin as an alternative asset class. Bitcoin, known for its volatility, has attracted investors looking to diversify their portfolio against inflation and economic instability. This trend can be seen in the decrease of Bitcoins traded on exchanges, indicating more investors holding the cryptocurrency instead of short-term trading.

Furthermore, high transaction fees can be a deterrent for investors looking to move their funds. Bitcoin’s transaction fees have been volatile in the past, reaching record highs of more than $60 per transaction in late 2017. Since then, the fees have decreased but are still relatively high when compared to other cryptocurrencies. This discourages investors from actively trading or moving their funds, thereby contributing to the increase in dormant Bitcoins.

Finally, the market’s uncertainty and volatility have been a significant factor in the dormant state of Bitcoin. The cryptocurrency market is highly unpredictable, with sudden drops and spikes in value. These fluctuations cause uncertainty and lead to investors holding on to their Bitcoins until the market stabilizes.

In addition, Glassnode’s report highlights that only 4.123% of all transactions sold were Bitcoin older than 6 months. This further emphasizes the trend of long-term holding and highlights the potential lack of liquidity in the market.

In conclusion, the dormant state of Bitcoin’s supply is a complex issue influenced by several factors, including investor behavior, transaction fees, and market volatility. The community must closely monitor these trends and develop strategies to encourage more active trading and movement of Bitcoin to ensure liquidity in the market.

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