Analysis: The balance of BTC on exchanges hit a five-year low, and BTC prices may rise rapidly in the future due to "supply shocks"

Glassnode data shows that the balance of available Bitcoins on crypto exchanges - liquid tokens that investors can easily buy and sell - has dropped to 2.3 million, the lowest level since April 2018. It is reported that the balance of BTC on the exchange was 2.6 million a year ago, and reached a peak of 3.2 million in May 2020. Matt Weller, global head of research at Forex.com, said Bitcoin's supply is increasingly constrained and leaves the asset exposed to a potential "supply shock" as the balance falls to a five-year low. Meanwhile, approximately 3 million BTC have not been moved in ten years. For comparison, the current total supply of Bitcoin is 19.5 million, and the maximum supply of Bitcoin is 21 million. So Weller believes that with less supply in the market, only a small increase in demand can really push prices up quickly. Weller said that unlike futures-based products, spot ETFs could "fundamentally change the supply and demand situation for Bitcoin," allowing new investors to invest. He added that Bitcoin is once again an "uncorrelated asset" decoupled from the stock market, especially now that its price has risen as U.S. stocks enter correction territory. Weller said that if some large funds choose to allocate small amounts to this uncorrelated or occasionally uncorrelated asset, that could be a very bullish sign for Bitcoin and the crypto space as a whole. (CoinDesk)