Investors continue to go long: 270,000 Bitcoins locked in one month

Despite the surge in prices, Bitcoin investors are rapidly locking up their coins for the long term, with 270,000 BTC removed from Bitcoin’s circulating supply in the past 30 days.
According to data released by crypto market data aggregator Glassnode, “liquid” Bitcoin wallets have lost 270,000 BTC in the past month, an amount that is up from 175,000 BTC in early January.

Monthly Bitcoin circulating supply changes Source: Glassnode

Data shows that Bitcoin’s (BTC) circulating supply has continued to decrease over the past nine months, with the current circulating supply at 21.3%, showing no signs of reversing.
Bitcoin’s dwindling circulating supply could be a boon to its price as new retail and institutional traders vie for the dwindling supply. Glassnode estimates that nearly 80% of the 18.6 million Bitcoins in circulation are currently stored in “illiquid” wallets.
Glassnode states that a Bitcoin wallet is considered illiquid if it has transferred less than 25% of the Bitcoin it received over its lifetime. In contrast, to be considered highly liquid, the majority of Bitcoin in the wallet must re-enter circulation, while holding less than 25% of the Bitcoin that has flowed in.

Bitcoin's circulating supply. Source: Glassnode

The 3.9 million BTC described by Glassnode is a high circulating supply, of which 61% (2.38 million) is held by centralized exchanges. The balances of centralized exchanges are also decreasing, and data from crypto analysis firm CryptoQuant shows that their Bitcoin reserves have shrunk by 13.8% since July.
Increased institutional investment may be an important force driving the depletion of Bitcoin's circulating supply. Wallet tracking service Bitcoin Treasuries currently estimates that 33 institutional entities have hoarded more than 1.2 million BTC (6.5% of Bitcoin's circulating supply).
Grayscale has accumulated about 25,000 BTC in the past few days, and as of January 20, 2021, it holds 641,523.7 BTC in its portfolio. To put this into perspective, about 900 new Bitcoins are generated every day. However, data from Glassnode shows that since July 2020, on average only one-third of Bitcoin has been sent to exchanges.
Data from investment firm SwissBorg shows that institutional investors bought an average of more than 230% of new Bitcoin in the second half of 2020. Adding purchases from PayPal and Square (and the estimated number of Bitcoins lost each day), institutional demand could be as high as 500% of new supply.
Earlier today, BlackRock, the world's largest asset management company, submitted documents to the SEC (U.S. Securities and Exchange Commission) indicating that it may invest in Bitcoin derivatives. Entering 2021, the company manages $7.81 trillion in assets, more than 7 times the total market value of cryptocurrencies. (Cointelegraph)