Finance

Bitcoin’s Illiquid Supply Surges: How Smart Money Is Reshaping the Crypto Market

Over 72% of Bitcoin is illiquid; whales absorb at record rates, signaling strong long-term conviction.

September 19, 2025, 11:12 AM

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Executive Summary

Bitcoin’s illiquid supply has reached a record 14.3 million BTC, representing over 72% of its circulating supply, indicating strong long-term conviction among investors and reduced sell-side pressure.

Long-term holders, corporate treasuries, and institutional players, including spot ETF issuers, are accumulating Bitcoin at record rates, leading to a significant consolidation of BTC supply.

Cryptocurrency exchanges are experiencing historic net outflows of Bitcoin as larger holders, particularly whales and sharks, absorb BTC at approximately 300% of the yearly issuance, preferring self-custody or long-term investment.

The Story So Far

The Bitcoin market is experiencing a significant structural shift as a record 72% of its circulating supply is now classified as “illiquid,” held by long-term investors, including large entities, corporate treasuries, and spot ETF issuers. This sustained accumulation reflects growing confidence in Bitcoin’s future value among major players, leading to reduced sell-side pressure and a shrinking supply available on exchanges, further driven by increasing adoption from traditional finance.

Why This Matters

The record illiquid supply of Bitcoin, with over 72% of its circulating supply now held by long-term investors, signals a significant structural shift in the market. This sustained accumulation by large entities, including whales, corporate treasuries, and spot ETF issuers, is absorbing Bitcoin at unprecedented rates, leading to reduced sell-side pressure and a shrinking availability of BTC on exchanges. This trend suggests growing long-term confidence in Bitcoin’s future value and could potentially drive price appreciation due to tightened supply.

Who Thinks What?

Market intelligence firm Glassnode indicates that a record 14.3 million BTC, over 72% of the circulating supply, is now illiquid, held by long-term conviction investors, suggesting reduced sell-side pressure and historic exchange outflows as whales and sharks absorb BTC at record rates.

Asset management firm Fidelity projects that long-term holders and corporate treasuries could collectively lock up over 6 million BTC by the end of 2025, a move that would further tighten supply and potentially boost prices, reflecting growing confidence in Bitcoin’s future value.

Bitcoin’s illiquid supply has reached a record 14.3 million BTC, indicating that over 72% of the cryptocurrency’s circulating supply is now held by investors with a strong long-term conviction, according to data from market intelligence firm Glassnode. This significant accumulation by large investors and long-term holders suggests reduced sell-side pressure and a shrinking availability of BTC on cryptocurrency exchanges.

The amount of Bitcoin held by entities for over seven years without selling has increased by more than 422,430 coins since January 1, reaching the new high last Friday. With Bitcoin’s current circulating supply at approximately 19.92 million, this means the majority of all mined BTC is now classified as illiquid.

This trend signifies that investors are choosing to hold their Bitcoin rather than trade it, thereby shrinking the portion of the supply readily available for sale on exchanges. It also highlights a sustained accumulation effort among long-term holders (LTHs) and whales, reflecting growing confidence in Bitcoin’s future value.

Investor Accumulation Trends

Asset management firm Fidelity projects that LTHs and corporate treasuries could collectively lock up over 6 million BTC by the end of 2025, a move that would further tighten supply and potentially boost prices. The firm’s research indicates a consistent quarter-over-quarter increase in Bitcoin supply held by LTHs since 2016.

Similarly, the supply held by publicly traded companies with at least 1,000 BTC has shown a quarter-over-quarter increase since 2020. Fidelity estimates that this combined group will hold over 28% of the total 21 million Bitcoin that will ever exist.

Further underscoring this trend, the collective holdings of corporate Bitcoin strategic reserves and spot exchange-traded fund (ETF) issuers have risen 30% in 2024, climbing to 2.88 million BTC from 2.24 million on January 1. This increase signals a steady consolidation of BTC supply into the hands of major institutional and corporate players.

Exchange Outflows and Whale Activity

According to Glassnode data, Bitcoin whales and sharks are currently absorbing BTC at record rates, approximately 300% of the yearly issuance. Concurrently, cryptocurrency exchanges are experiencing an historic pace of coin outflows, reflecting a growing preference for self-custody or longer-term investment strategies among holders.

Bitcoin’s yearly absorption rate by exchanges has plunged below -150%, indicating a significant net outflow of BTC from these platforms. Meanwhile, larger holders, defined as those possessing 100 to over 1,000 BTC, are accumulating almost three times the new Bitcoin issuance, marking the fastest rate of accumulation in Bitcoin’s history for these investor groups.

Key Takeaways

This persistent accumulation by large entities and the shift towards illiquid holdings mark a structural change in the Bitcoin market. The increasing adoption by traditional finance, evidenced by the emergence of Bitcoin treasury companies and sustained ETF demand, is leading to less BTC supply on crypto exchanges and fostering long-term bullish conviction among significant investors.