Investors are hoarding Bitcoin, the Liquidity problem might push the price even higher!

Bitcoin_Liquidity

Bitcoin is becoming more difficult to buy, according to analysts at Glassnode. The amount of BTC received and spent among entities is decreasing, which means the liquidity is declining.

If Bitcoin liquidity is low, it means there is less BTC available to buy and sell. In the medium term, this could make BTC even more scarce.

Throughout 2020, institutions have been increasingly accumulating Bitcoin, which has become compelling because of its fixed supply.In recent months, the concerns about inflation and rising central bank liquidity have intensified. This trend has led high-profile institutional investors, like Paul Tudor Jones, to consider Bitcoin as a potential hedge against inflation.

Meanwhile, a trend that was kickstarted by MicroStrategy’s $425 million Bitcoin purchase in the summer spilled over to other financial giants. Eventually, PayPal, Square and even insurance conglomerates like MassMutual stepped into the fray.

Consequently, the institutional accumulation of Bitcoin has accelerated since. As a result, Glassnode found that only 4.2 million BTC are in constant circulation for buying and selling.

All of these means that Bitcoin is on track for an explosive 2021.

Want to know how to start investing in Cryptocurrencies and Stocks? Click here and get more information about the top investing platform available.

Buy crypto instantly on Uphold