According to asset management firm Fidelity, approximately 42% of Bitcoin’s current circulating supply, equating to 8.3 million Bitcoin (BTC), could become “illiquid” by 2032, based on the ongoing purchasing activity by Bitcoin treasury firms.
In a report released on Monday, Fidelity categorized two groups whose supply can be viewed as illiquid, identifying them by a steady increase in their Bitcoin holdings each quarter, or in at least 90% of the quarters over the last four years.
From this analysis, it recognized two cohorts: long-term Bitcoin holders and publicly-traded companies possessing a minimum of 1,000 Bitcoin, the latter of which has shown growth this year.
The illiquid supply of Bitcoin indicates lesser availability on the market, which could be favorable for Bitcoin’s price.
“We project that this combined group will control over six million Bitcoin by the end of 2025 — representing more than 28% of the total 21 million Bitcoin that will ever exist,” Fidelity stated.
Long-term holders, defined as individuals who have not moved Bitcoin from their wallets for at least seven years, have not seen any supply decrease since 2016.
Similarly, the second group, publicly traded companies holding at least 1,000 BTC, have generally maintained their Bitcoin reserves, experiencing just one quarter of supply decline in Q2 2022.
This cohort may expand in the future, with 105 publicly traded Bitcoin-holding companies currently in existence. Together, these companies hold over 969,000 BTC, which accounts for 4.61% of Bitcoin’s total supply, according to Bitbo data.
42% of Bitcoin supply to become illiquid
Looking forward, Fidelity forecasts that 8.3 million BTC may become illiquid by the second quarter of 2032.
This estimate is based on the assumption that wallets holding BTC for at least seven years will maintain their supply growth at the same rate as observed in the last decade.
Additional supply shortages caused by more public companies were not considered in this analysis.
“By the end of Q2 2025, Bitcoin’s circulating supply was approximately 19.8 million. From that, we estimate that nearly 42% — or over 8.3 million Bitcoin — will be deemed illiquid by Q2 2032.”
Potential sell-off by whales
The report noted that these two groups collectively hold Bitcoin valued at $628 billion, with an average price of $107,700, doubling from the previous year by the end of the second quarter.
Related: Bitcoin whales are selling again as BTC remains stable at $116K
This raises concerns about the potential impact on Bitcoin’s price if whales begin to sell their BTC reserves.
In the past 30 days, Bitcoin whales have sold collectively nearly $12.7 billion worth of BTC, marking the largest sell-off since mid-2022. During the same period, Bitcoin’s price has dropped by 2%, according to CoinGecko.
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