CoinShares refuted the thesis of a lack of BTC liquidity.

# CoinShares debunked the thesis of Bitcoin's liquidity shortage.

The popular thesis in the community about the liquidity crisis of the first cryptocurrency does not correspond to reality, said Christopher Bendiksen, head of bitcoin research at CoinShares.

The expert analyzed two key arguments: the reduction of digital gold reserves on exchanges and the increase of coins in illiquid UTXO. He pointed out an error in interpretation — when assessing liquidity, it is important to consider not the number of coins, but their value in dollars.

Bitcoin liquid supply price chart in quarterly terms. Source: CoinShares

“Even with the reduction in the number of liquid bitcoins in absolute terms, their total value continues to grow. […] As seen [in the graph above], it increases almost in the same progression as the illiquid supply, since the determining factor here is the price,” explained Bendiksen.

The expert also made a chart of the total value of coins on exchanges, which indicates that there are no liquidity issues:

Source: CoinShares

“The volume of available liquidity is nearly double the peak levels of the last bull cycle, and a new major source has been added — Bitcoin-ETFs trading on Nasdaq,” he noted

According to his calculations, a sharp rally in prices requires investors to buy more than a million coins each year at current prices. Only such a scale of demand can create a shortage and provoke a frenzied rise.

“There will always be enough coins”

Bendiksen believes that “any amount of the first cryptocurrency will be enough to satisfy any dollar demand.” He referred to the possibility of digital gold being infinitely divisible, for example, into satoshis.

In his opinion, the ideas about a reduction in liquidity to levels described by some experts “look disconnected from reality.” The only scenario for the “God candle” is a collapse in demand for the US dollar as a base currency. Although such an outcome is possible in the historical perspective, it is unlikely in the foreseeable future, the analyst emphasized.

“Meanwhile, with the steady rise in the price of Bitcoin and the slow selling by long-time holders in response to new demand during each price rally, it seems that there are enough coins for everyone at any prevailing rate,” he summarized

Let us remind you that the trader under the pseudonym CrypNuevo allowed for the formation of a bottom for digital gold at the level of (000.