Some speculate that Chinese miners haven't been able to sell their BTC because of a regulatory crackdown, and that has led to a "liquidity crunch"
Lots of anecdotes, but here is some empirical evidence ⬇️
1\ First, let's look at supply held by Mining Pools (red line) and individual Miners (green line).
As you can see, Pools (red) are not selling, but that's part of a long-term trend.
Individual miners (green) are selling, which goes against the narrative of a liquidity crunch.
2\ Now, let's look at miner outflows, which directly measures outgoing payments from both Pools (red) and Individual miners (green)
Again, the data invalidates that narrative. The recent spikes in funds Sent shows that miners are moving assets, which signals ability to sell.
3\ The 30-day Miner Rolling Inventory also suggests that nothing out of ordinary is taking place in mining pools or their individual constituents.
4\ Also, consider the size of Bitcoin markets vs miner rewards.
At the current volume (billions of USD), miners are unlikely to play this significant of a role in liquidity, as their daily payout rarely surpasses 20M USD.
5\ So, based on this data, I find it unlikely that this rally is being driven by a liquidity crunch in China.
Other factors, such as increased institutional participation and macroeconomic concerns, are more likely the culprit.
In previous Bull Markets, the MVRV ratio was one of the most reliable indicators of market tops.
It reached 3.96 in 2017 when Bitcoin flirted with $20k
MVRV-FF is currently at 1.96
If you believe history rhymes, this suggests we're not even close to the "euphoria" phase.
This is not investment advice. MVRV simply tracks how the overall market valuation (market cap) compares against everyone's "cost basis" (realized cap).
It spikes when market value is disproportionately higher than the value being moved on-chain.
You may notice that our MVRV figures are different.
That's because we use Free Float (FF) Market Cap instead of "total" Market Cap to determine market valuation.
FF better represents liquidity, since it removes supply that's unlikely to be in the market (e.g. BTC from 2009)
Bitcoin settled the equivalent of *2.3 trillion USD* in Epoch III
For context, Visa+Mastercard Credit Cards settled 2.6T USD in the entire United States in 2017.
It's insane that a bootstrapped, 10yr old network settles values in the same magnitude of the largest CCs in the US.
The count of addresses holding over 100k sats (0.001 BTC) sats can be seen as a proxy for adoption, and on May 1st, the network reached an ATH with over 16M addresses holding at least 100k sats 🤯