Bitcoin OTC reserves fall to historic low

The amount of Bitcoin available through OTC desks, platforms where large parties trade off-exchange, has fallen to the lowest level ever measured. While there were still almost 500,000 BTC on these desks in September 2021, this has now fallen to 123,000 BTC. Analyst Darkfost writes this on X, based on data from CryptoQuant. The decline raises questions about the cause and what it means for the Bitcoin price, which currently stands at around $80.326.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin reserves on OTC desks reach a historic record low of 123,000 BTC
• Compared with September 2021, the supply has decreased by more than 75%
• Analyst Darkfost sees this as a possible upward pressure on the market price

From 500,000 to 123,000 BTC in five years

OTC desks are trading channels through which large parties, such as miners, funds and institutional investors, trade Bitcoin directly with each other without this going directly through an exchange. This prevents large sales from affecting the market price.

The CryptoQuant chart shows that the total OTC balance has been steadily declining for years. In 2021 the figure still stood at almost 500,000 BTC, but since then it has fallen almost continuously. The current level of 123,000 BTC is the lowest point ever recorded.

Less supply outside the market

Analyst Darkfost mentions several possible explanations for the decline on X. A first reason is that more and more investors are holding on to their Bitcoin and are less willing to offer it through OTC channels. He also points to the declining centralisation of Bitcoin, with miners in particular previously making extensive use of OTC desks to sell without affecting the price.

A third explanation is simply that sellers nowadays prefer to trade directly on the open market. Whichever reason is decisive, the result is that less and less Bitcoin is being offered for sale outside the exchange.

Darkfost concludes that buyers will therefore increasingly have to make purchases on the regular market, which, with unchanged or rising demand, could mean downward pressure on supply and upward pressure on price. Bitcoin is currently trading at $80.300, a decline of 1.1% over the past 24 hours.