Long-Term Holders Now Own 21% of All Bitcoin – and Liquid Supply Has Never Been Tighter

Back in early 2023, that figure sat at around 1.3 million. Over three years, this cohort has more than tripled its holdings without any visible intention to sell.

The broader supply picture adds weight to that number. Of the approximately 19.7 million Bitcoin currently in existence, somewhere between 3 and 4 million are considered permanently inaccessible – locked in forgotten wallets, lost private keys, or addresses with no surviving access. Strip out the long-term holders on top of that, and the amount of Bitcoin actually available for active trading amounts to less than half of everything that will ever exist. This is not a temporary market condition – it is a structural contraction of supply that compounds with each passing cycle.

Where the Money Went in Q1 2026

Against that backdrop, JPMorgan published an analysis led by Managing Director Nikolaos Panigirtzoglou estimating that total capital inflows into digital assets for the first quarter of 2026 reached approximately $11 billion, Coindesk reported. In isolation that figure sounds significant, but the year-over-year comparison tells a different story: Q1 2025 drew roughly three times as much. If the current pace holds through the rest of the year, total 2026 inflows would land around $44 billion – a steep retreat from the record $130 billion recorded across all of 2025.

The composition of those $11 billion matters as much as the total. JPMorgan’s analysts attribute the bulk of Q1 inflows to two relatively narrow sources: corporate treasury purchases, largely driven by Michael Saylor’s Strategy, and concentrated venture capital funding directed at crypto infrastructure. The broader demand channels, by contrast, have underperformed.

Spot Bitcoin and Ethereum ETFs registered net outflows – particularly sharp in January – before a partial recovery toward the end of March, according to data from Farside Investors. CME Bitcoin futures positioning weakened throughout the quarter, signaling softening institutional appetite via derivatives. Retail investors and traditional institutional allocators were characterized as showing demand that is either flat or negative for the year so far.

Miners Selling, Leverage Gone

JPMorgan’s analysts describe the current market structure as “fragile,” precisely because it depends on a thin layer of large corporate buyers rather than a diversified base of participants. An additional source of selling pressure has come from Bitcoin miners, who have become consistent net sellers – partly to cover capital expenditures and partly because many are redirecting their infrastructure toward artificial intelligence workloads.

Market sentiment more broadly remains subdued following a roughly $19 billion liquidation event in late 2025 that flushed a significant amount of leveraged exposure from the system.

Bitcoin mining profitability has dropped significantly and as long as prices remain below the cost, smaller firms will continue to shift their businesses to more lucrative sectors – such as AI. The bigger companies can withstand a prolonged downturn and operating at a loss for some time – although even some of the bigger firms are starting to see more opportunities elsewhere.

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Supply vs. Demand – an Unresolved Tension

The gap between the two pictures – a structurally tightening supply at the chain level and cooling institutional demand at the capital flows level – puts the market in an unusual position.

The bullish argument is straightforward: if an ever-larger share of supply is being absorbed by holders who refuse to sell, any meaningful uptick in demand will run into a wall of scarcity.

The bearish counterargument is equally concrete: if the major demand drivers – ETFs, futures markets, retail participation – do not recover, supply dynamics alone carry limited weight for near-term price action.

What Analysts Are Forecasting

Year-end forecasts span a range wide enough to accommodate almost any outcome. JPMorgan had earlier projected Bitcoin could reach $150,000 to $170,000 by end of 2026, contingent on ETF growth and broader availability of crypto custody services.

Grayscale has suggested this year could mark the end of the traditional four-year halving cycle, with the market transitioning toward a more institutionally driven phase as regulatory clarity improves. On the other side, analysts including Bloomberg’s Mike McGlone have outlined scenarios in which speculative assets face significant pressure during a prolonged bear phase. Price targets from various research desks span from a floor of $75,000 to bullish peaks above $225,000 – a range too wide to be operationally useful for most allocation decisions.

Bitcoin’s available supply is contracting at the chain level while the new institutional demand needed to absorb that scarcity remains uneven at best. Whether that asymmetry eventually acts as a price catalyst or simply continues to express itself through declining volume and sideways price action remains an open question for the rest of the year.

And with the ongoing conflict in the Middle East and broader risk-off sentiment, it doesn’t seem we are going to witness a crypto market rebound in the short-term. While there are some expectations for the bear market to end in 2026 (at least there were before the war started), now the situation is much more complex and macro factors have more weight than Bitcoin’s fundamentals and chart patterns.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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