There is a dedicated supply for each cryptocurrency out there. It is not going to increase magically because there is a fixed amount that is put into circulation. This totals the number of bitcoins that are currently being withheld, bitcoins that were traded today, last month, or last year, and the bitcoins that have been converted into fiat currency.
So, the consensus here is that there are only a fixed number of bitcoin tokens that are in circulation, and of that 100% of bitcoin tokens, about 34% are already lost or being held for longer times until the holder wishes to sell them on the open market. It means that 34% of the bitcoins that are reserved in these wallets are not accessible to the world at all; these are not included in any open market trade; it is as if these tokens don’t even exist, but the irony of it is that these tokens are present and currently lying face down in digital wallets.
Long-Term Holding of Bitcoin is not Good
The outflow dominance of the crypto market in relation to bitcoin according to the on-chain data remains strong, which means more and more bitcoins seems to be leaving the exchange and the inflow dominance, which are the number of bitcoin tokens being traded or chipped into the market for money remains strictly lower. Whenever the cryptocurrency is in a bullish run, which proposes a strong investing phase for the cryptocurrency, the whole market kind of delves into it, and more and more people are suddenly interested in making their bitcoin stay in random wallets for an indefinite period of time.
This, in particular, is not a very healthy model of how bitcoin should be distributed and in what allocation it should be tossed into the digital wallets. In fact, when all this bitcoin that the holders were withholding over such extensive time periods is chipped back into the market to be transferred into fiat, the market is dismantled into multiple arrays of self-correction and instability. No wonder why bitcoin crashes hard every now and then during those corrections; it is the result of the long-term holding of the cryptocurrency and robbing the tokens of normal circulation.
