Supply of Bitcoin (BTC) has fallen to a level that hasn't been seen in years.
More than half the Bitcoin supply is held on cryptocurrency exchanges, with 1.3 million BTC, or 6.3 percent of the total, according to CryptoRank.
The declining supply is nothing new; it has been on a downward trend since Bitcoin's block reward was halved in 2020.
Following suit, the availability of BTC on exchanges has dwindled over the last year.
The amount of Bitcoin in illiquid state exceeds the amount currently being mined.
With less and less BTC being sent to exchanges, the exchange supply shortage is likely to get worse.
Aside from the fact that many retail investors and some large corporations store their BTC on exchanges, the "illiquid" BTC may be even lower than previously thought
Coinbase's BTC wallet market share is also decreasing. Until recently, the American exchange held more BTC than any other exchange in the world.
Over the past year, its share of the market has decreased from 50.52 percent to 40.65 percent.
Due to the lack of liquidity in the market, 1.3 million BTC may not actually be "circulating" on exchanges.
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