Bitcoin Supply Shock: Circulating Supply Reaches Lowest in Over 4.5 Years

# Bitcoin Rebounds to $93,000 Amid Supply Shortage and Market Liquidity Changes Bitcoin (BTC) has moved from a downward trend to a recovery phase, currently trading at approximately $93,000. Market participants are now faced with a key development: the Bitcoin supply available for circulation has plummeted to its lowest point in four and a half years. On October 24, on-chain analytics firm CryptoQuant revealed that the total amount of Bitcoin available for sale, or liquid supply, is only 3.397 million BTC. This is the lowest since October 2020, encompassing holdings from entities such as exchanges, miners, over-the-counter (OTC) desks, and institutional products like Grayscale Bitcoin Trust (GBTC). # Rising Demand Intensifies Supply Constraints According to CryptoQuant, demand for Bitcoin has been growing steadily since late September 2022. Around 228,000 BTC are absorbed by the market each month. Notably, "accumulator addresses," which purchase Bitcoin consistently without selling, have been acquiring Bitcoin at an unprecedented rate of 495,000 BTC per month. This significant demand from long-term holders is further reducing the Bitcoin in circulation, tightening market liquidity. Analysts warn that this trend is intensifying the liquidity crisis within the Bitcoin market. # Wider Digital Asset Market Experiences Liquidity Growth While Bitcoin's supply metrics indicate contraction, the overall liquidity of the broader digital asset market is expanding. The total market capitalization of dollar-pegged stablecoins like Tether (USDT) and USD Coin (USDC) has soared to $200 billion, equivalent to about 287 trillion won, reflecting a 20% increase since late October last year. Typically, an increase in stablecoin supply signals fresh capital flowing into the digital asset ecosystem, enhancing market dynamics and showing increased investor interest. Although stablecoin expansion suggests improved liquidity for the broader cryptocurrency market, Bitcoin’s supply constraints remain a significant concern. The interaction between dwindling Bitcoin reserves and growing demand could crucially influence future price movements and market trends.