Recent analyses reveal that a significant percentage of Bitcoin (BTC), Ether (ETH), and Solana (SOL) are being held at a loss:

• 40% of Bitcoin is reported to be at a loss, while 40% of ETH and a staggering 75% of SOL reflect a similar fate. Should we be concerned?

Important Insights:

• A considerable portion of ETH and SOL held at a loss is illiquid, with over 40% of ETH and more than 75% of SOL locked within staking mechanisms, ETFs, or strategic reserves.
• Although Bitcoin’s at-loss figures are high, actual liquid BTC supply is significantly less, due to institutional holdings and lost coins.

Loss Indicators Don’t Truly Reflect Liquid Supply

Currently, 35% of Bitcoin’s supply is held at a loss, reminiscent of a time when BTC hovered around $27,000. However, the effective liquid supply is much lesser:

• Circulating BTC supply: 19,953,406
• BTC held by institutions and ETFs: 3,725,013 BTC
• Estimated lost BTC: 3,000,000 to 3,800,000 BTC, which constitutes 15% to 19% of total circulation.

By accounting for these elements, nearly 33% of Bitcoin effectively leaves liquid circulation, as institutional and lost holdings are less likely to react to passing market fluctuations.

Analyzing ETH, we find:

• Circulating ETH supply: 120,695,601
• Staked ETH: 35,681,209 ETH (≈29.6%)
• ETH in spot ETFs: 6.26M ETH (≈5.18%)
• ETH in strategic reserves: 6.36M ETH (≈5.26%)

This indicates that over 40% of ETH is essentially locked up, reducing its liquid supply and susceptibility to quick market changes.

Similarly, while 70% of circulating SOL faces loss:

• Circulating SOL supply: 559,262,268
• Staked SOL: 411,395,790.5 SOL (73.6%)

Both ETH and SOL metrics for supply-at-loss diminish during upswings, reflecting price movements more than panic selling. Thus, the apparent loss percentages could overstate the actual sell-off risks. After factoring in locked supplies, institutional holdings, and irretrievable coins, the situation appears less precarious for these major cryptocurrencies.

Related Article: Bitcoin data calls $80K the bottom

Please note: This information is not investment advice. Always perform your own research before making financial decisions.