Recent data from Glassnode showed that Bitcoin (BTC), Ether (ETH), and Solana (SOL) have record-breaking supply that’s being held at a loss.
However, a better examination of the locked supply, institutional holdings, and staking structures revealed that the effective liquid supply under pressure is significantly lower than the implied percentages, particularly for Ether and Solana.
Key Takeaways:
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A significant slice of Ether and SOL held at a loss isn’t liquid, with over 40% of ETH and greater than 75% of SOL tied up in stakes, ETFs or strategic reserves.
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The loss supply of Bitcoin gave the impression to be high, but institutional holdings and the lost BTC supply significantly reduce the actual liquidity supply.
Loss positions don’t reflect the actual liquid inventory
Bitcoin currently has 35% of its supply held at a loss, a level last seen when BTC was trading at around $27,000. But even and not using a staking mechanism, Bitcoin's liquidity supply is much lower than the numbers suggest. Below are the important thing statistics:
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BTC circulating supply: 19,953,406
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BTC held by public/private corporations, ETFs and countries: 3,725,013 BTC
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BTC lost ceaselessly (estimates): 3,000,000-3,800,000 BTC. This corresponds to fifteen.0% to 19.0% of the whole circulating supply.
The share of Bitcoin supply in profits is declining sharply. Source: Glassnode
Combined, these aspects remove roughly 33% of all Bitcoins from circulation. Institutional holdings, particularly ETF Treasuries and company Treasuries, should not sensitive to short-term volatility because they operate inside mandates tied to reserves, long-term accumulation or index tracking. The lack of BTC further reduced the provision that may reply to loss-related pressures.
Aether numbers required a more nuanced interpretation. While 37% of ETH is currently held at a loss, a significant slice of the network's offering is locked or held institutionally:
Overall, over 40% of all ETH is effectively tied up in stakes, ETFs or long-term institutional reserves. These categories have historically been unresponsive to short-term volatility because institutional products (ETFs, custodial reserves) operate under policies that prioritize long-term accumulation over discretionary selling. As a result, the actual supply of liquid ETH subject to loss-related pressure is significantly smaller than the 37% mentioned above.
Solana showed a fair stronger divergence. Although 70% of SOL in circulation is held at a loss, the network has certainly one of the very best stake rates amongst major chains:
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SOL circulating supply: 559,262,268
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Staked SOL: 411,395,790.5 SOL (73.6%)
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SOL in ETFs: about 1% of circulating supply
This signifies that greater than three quarters of all SOL are tied to validator staking or institutional products, none of which exhibit rapid selling behavior. Notably, because the SOL fell to $121, the loss-making supply narrowed to 80%, a level it had previously reached when the worth was near $20, highlighting the metric's sensitivity to a fast price adjustment reasonably than a structural capitulation.
Interestingly, each ETH and SOL's supply-at-loss metrics are inclined to fall sharply during uptrends because they’ve strong staking locks, so such spikes reflect price velocity reasonably than panic positioning.
Overall, the raw loss percentages on all three assets overestimate potential selling pressure. Once the locked supply, institutional holdings, and permanently lost coins are taken under consideration, the actual liquid supply in danger is significantly lower.
This article doesn’t contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their very own research when making their decision.
