Bitcoin’s Stagnant Supply Hits Record Level

According to analysis by investment firm Ark Invest, around 70 percent of the circulating supply of Bitcoin has been dormant for at least a year. This rate was recorded as a new record. In addition, according to the company, the picture points to a growing investor base and reflects the confidence of long-term investors in Bitcoin.

After BlackRock filed for a Bitcoin exchange-traded fund (ETF) on June 15, the price gap to the Grayscale Bitcoin Trust’s (GBTC) net asset value (NAV) fell from 42 percent to 30 percent, the lowest in a year. dropped to the point. According to Ark, the narrowing price spread may indicate that investors are waiting for a Bitcoin spot ETF to be approved. This may increase the likelihood of GBTC being converted to an ETF. Last week, Ark suggested that BlackRock’s ETF application could be a “landmark” for BTC. Days later, the CBOE overhauled its application for Ark’s Bitcoin ETF, adding a surveillance sharing agreement similar to BlackRock’s to prevent fraudulent activity and market manipulation.

The report also noted the divergence in trends observed between USDC and Tether. USDC supply has dropped 37 percent this year, while Tether grew 25 percent to its highest level ever in June. According to Ark, the observed difference can be attributed to the existence of an uncertain regulatory environment in the US, which has led to some cryptocurrency activities being relocated abroad. Ark also noted that the temporary separation of USDC from its stable in March, after Circle was revealed to hold $3.3 billion of USDC’s reserves at the bankrupt Silicon Valley Bank, also played a role in this divergence.

Despite the positive indicators regarding Bitcoin, the report by Ark warns of impending economic difficulties. Data from the manufacturing sector, in particular, revealed a decline in new orders, as reflected in the Purchasing Managers Index. In addition, Ark noted that there has been a sequential contraction in the US Gross Domestic Income (GDI), which indicates the potential emergence of a recession.