Bitcoin (BTC) continues to demonstrate its growing role as a long-term store of value, as on-chain data reveals a significant shift in supply dynamics. According to analytics platform Glassnode, Bitcoin’s illiquid supply has surged from 13.9 million BTC at the beginning of 2025 to over 14.37 million BTC, marking a pivotal moment in market behavior.
With the current circulating supply of Bitcoin sitting at approximately 19.8 million BTC, this means more than 72% of all mined bitcoins are now classified as illiquid—effectively locked away from active trading and unavailable for immediate sale.
What Is Bitcoin’s Illiquid Supply?
The illiquid supply refers to bitcoins held by long-term investors, institutional wallets, and cold storage users who show minimal transaction activity. These coins are considered “out of circulation” because they remain untouched for extended periods—often years.
Unlike highly liquid coins that move frequently between exchanges and traders, illiquid holdings reflect confidence in Bitcoin’s future value. When investors choose to hold rather than trade, they reduce the available supply on the market, tightening scarcity and potentially increasing upward price pressure.
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This growing trend underscores a fundamental shift: Bitcoin is increasingly being treated not as a speculative asset, but as a digital store of value, akin to digital gold.
The HODL Movement Gains Momentum
The term “HODL”—a community-coined phrase meaning to hold through volatility—has evolved from internet slang into a measurable market phenomenon. The surge in illiquid supply reflects a deepening conviction among holders that Bitcoin’s long-term prospects outweigh short-term price fluctuations.
Glassnode’s data suggests that:
- Long-term holders (LTHs) are accumulating and refusing to sell, even during periods of high volatility.
- Exchange outflows continue to exceed inflows, indicating coins are being withdrawn and stored securely offline.
- The number of dormant addresses (those with no outgoing transactions for over 15 months) is rising steadily.
These behaviors collectively point to a strengthening HODL economy, where investor psychology prioritizes preservation and patience over quick profits.
This shift also aligns with macroeconomic factors: rising institutional adoption, increased regulatory clarity in key markets, and growing awareness of Bitcoin’s fixed supply cap of 21 million coins.
Scarcity Meets Rising Demand
One of the most powerful forces in any market is the interplay between supply and demand. In Bitcoin’s case, the shrinking pool of liquid supply comes at a time when demand continues to grow.
Key demand drivers include:
- Institutional investment via spot Bitcoin ETFs in the U.S. and other regulated markets.
- Global macroeconomic uncertainty, prompting investors to seek decentralized, inflation-resistant assets.
- Halving events, which reduce block rewards for miners and historically precede bull markets due to constrained new supply.
With over 72% of BTC now illiquid, only about 5.4 million BTC remain freely tradable—a number that shrinks further when accounting for lost coins and unspendable outputs.
This tightening supply landscape sets the stage for potential supply shocks, where even modest increases in demand can drive significant price movements. Historically, such conditions have preceded major rallies.
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Why Illiquid Supply Matters for Market Outlook
Illiquid supply isn't just a metric—it's a window into market sentiment and future price resilience.
When a large portion of the supply is locked up by confident holders, it reduces selling pressure during downturns. This creates a stronger floor for prices and makes it harder for bears to push the market lower.
Moreover, when new buyers enter the market, they must compete for a smaller pool of available coins. This bidding competition often leads to price discovery at higher levels, especially during periods of heightened interest.
Glassnode highlights that sustained growth in illiquid supply often correlates with:
- Lower realized volatility
- Higher network security (via increased UTXO age)
- Stronger resistance to market manipulation
In essence, the more BTC that is held long-term, the more robust and mature the network becomes.
FAQ: Understanding Bitcoin’s Illiquid Supply
Q: What exactly counts as “illiquid” Bitcoin?
A: Illiquid supply includes coins that haven’t moved in over 15 months, plus those held in long-term wallets, cold storage, or by entities like miners and early adopters who rarely transact. These are considered economically inactive.
Q: Does a high illiquid supply guarantee price increases?
A: Not directly—but it creates favorable conditions. Limited available supply combined with rising demand increases the likelihood of price appreciation, especially during bull cycles or macroeconomic stress.
Q: Could lost bitcoins be part of the illiquid supply?
A: Yes. While some illiquid coins may be lost forever (e.g., from forgotten private keys), Glassnode differentiates based on movement history rather than ownership status. Lost coins contribute to overall scarcity.
Q: How does the Bitcoin halving affect illiquid supply trends?
A: Post-halving, miner rewards drop by 50%, reducing new supply entering the market. This often incentivizes miners to hold rather than sell, further tightening liquidity and reinforcing HODL behavior.
Q: Is there a risk if too much supply becomes illiquid?
A: Extreme illiquidity could reduce market efficiency or increase volatility if sudden large sell-offs occur. However, current trends suggest organic growth driven by confidence—not systemic imbalance.
A Maturing Asset Class
The fact that over 14 million BTC are now out of circulation speaks volumes about investor trust. It reflects a maturing ecosystem where Bitcoin is no longer just a speculative experiment but a strategically held asset.
As global financial systems evolve and digital ownership becomes mainstream, Bitcoin’s role as a decentralized, scarce, and censorship-resistant store of value grows stronger.
The continued rise in illiquid supply indicates that many investors are positioning themselves for the long haul—regardless of short-term noise.
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This behavioral shift doesn’t just support price stability—it lays the foundation for broader adoption, deeper liquidity pools when needed, and greater resilience against external shocks.
Final Thoughts
Bitcoin’s journey from niche technology to global financial asset is mirrored in its on-chain metrics. The surge in illiquid supply to over 14 million BTC is more than a statistic—it’s a testament to enduring confidence in Bitcoin’s value proposition.
With scarcity intensifying and demand on the rise, the intersection of HODL sentiment, supply constraints, and growing institutional interest paints a compelling picture for the future.
For observers and participants alike, monitoring illiquid supply trends offers one of the clearest lenses into Bitcoin’s evolving market psychology—and its potential next move.
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