CryptoQuant: Bitcoin demand surges by more than 400%! Seriously short of supply

Monthly demand soared from 40,000 BTC in early 2024 to 213,000 at the time of writing. The BTC blockchain data analysis company CryptoQuant disclosed the amazing growth in Bitcoin demand in a report.

Bitcoin can’t find seller! The latest data shows that Bitcoin is facing unprecedented demand growth and tight seller liquidity. Bitcoin liquidity reserves have fallen to all-time lows as demand surges, signaling a potential sell-side liquidity crisis in the coming months.

BTC demand surges over 400%

After BTC broke through a record high of $73,000 in the middle of this month, it continued to fluctuate at a high of $70,000. Blockchain data analytics firm CryptoQuant revealed the staggering increase in demand for Bitcoin in a report this week.

Data shows that monthly demand soared from 40,000 BTC at the beginning of 2024 to 213,000 BTC at the time of writing, with demand increasing by as much as 432%. Separately, CryptoQuant measures this demand by analyzing the 30-day total balance growth of cumulative addresses (addresses dedicated to receiving and holding BTC). It is worth mentioning that these addresses hold more than 10 BTC, have no outflows, have been active in the past seven years, and do not belong to any centralized exchange or mining pool.

CryptoQuant said that as large holders such as US Bitcoin spot ETFs and whales actively entered the market, Bitcoin demand has witnessed an unprecedented leap. At present, the annual demand growth rate of Bitcoin has reached an all-time high, and the market dynamics caused by the "imbalance of supply and demand" are affecting the market direction.

Whale investors surge

The analysis pointed out that one of the main factors driving demand growth is the large number of whale investors entering the market. As of now, whales’ holdings have grown astonishingly from 874,000 Bitcoins at the beginning of 2024 to approximately 1.57 million Bitcoins. This figure shows that major investors in the market are extremely optimistic about Bitcoin.

However, in stark contrast to demand growth, sell-side liquidity is experiencing a sustained decline. Currently, the amount of BTC in sell-side liquidity is approximately 2.7 million BTC, which is significantly lower than the 3.5 million BTC in March 2020, which was the highest level in history.

These liquidity sellers include entities with liquid assets available for investors to purchase Bitcoin, such as Bitcoin reserves on 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 sell-side liquidity inventory can only meet demand for the next twelve months, which is estimated based on the current rate of demand growth and cumulative address demand. It’s worth noting that this estimate only refers to a low-level range of Bitcoin demand, suggesting that the actual situation may be more serious.