Bitcoin demand surges as inventory shrinks by 678K BTC in 2024

Bitcoin’s (CRYPTO:BTC) demand is accelerating, causing a rapid decline in available supply, according to CryptoQuant’s latest analysis.

The market intelligence firm revealed that Bitcoin’s apparent demand has been growing significantly since September, expanding at a rate of 228,000 BTC per month.

Meanwhile, the total supply of Bitcoin available for sale across various platforms, including crypto exchanges, over-the-counter (OTC) desks, miners, and the Grayscale Bitcoin Trust (GBTC), has fallen to levels not seen since 2020.

As demand increases, the available Bitcoin inventory has been shrinking faster.

OTC desks, which primarily serve institutional and large buyers, are seeing their balances decline as demand outpaces supply.

This marks the largest monthly inventory drop at OTC desks in 2024, with a decrease of 26,000 BTC, and a further 40,000 BTC drop since November 20.

“OTC desks source Bitcoin mostly for institutions and large buyers. If Bitcoin demand is outpacing supply, then OTC desks’ Bitcoin balances will decline, and vice versa. Right now, their balances are declining as demand outpaces supply,” CryptoQuant explained.

The market also saw a significant influx of liquidity, with the total market cap of USD-based stablecoins reaching $200 billion for the first time, marking a 20% increase since late October.

This is in line with Bitcoin's price rally above $100,000, which recently peaked at $108,000, reflecting the surge in demand.

Bitcoin’s sell-side liquidity has fallen to 3.397 million BTC, the lowest in over four years, down by 678,000 BTC this year.

The liquidity inventory ratio, which measures the duration of current sell-side inventory against demand, has decreased drastically from 41 months in October to just 6.6 months.

According to CryptoQuant, a declining sell-side inventory ratio is a strong indicator of the recent Bitcoin price rallies in 2024.

At the time of reporting, the Bitcoin (BTC) price was $94,663.58.