Recent insights from Glassnode indicate that Bitcoin, Ether, and Solana are experiencing record high levels of their supply held at a loss. Yet, a deeper analysis reveals that the amount of liquid supply genuinely under pressure is significantly less than these figures suggest, owing to substantial institutional holdings, staking, and locked reserves within these ecosystems.
Key Takeaways
- •A considerable portion of Ether and Solana held at a loss is not actively liquid, with over 40% of Ether and more than 75% of Solana locked in staking, ETFs, or strategic reserves.
- •While Bitcoin’s supply at a loss appears elevated, institutional holdings and permanently lost coins considerably diminish its true liquid float.
- •These structural factors mean the actual short-term sell pressure may be overstated by raw loss metrics alone.
- •In particular, Solana’s high staking ratio indicates that most of its supply remains locked away, reducing immediate supply liquidity.
Positions at a Loss Do Not Equate to Actual Liquid Supply
Currently, approximately 35% of Bitcoin’s supply is held at a loss—a level last seen when prices were near $27,000. However, the real liquid supply under pressure is much lower once institutional holdings and irretrievably lost coins are factored in. The circulating supply stands at roughly 19.95 million BTC, with institutions and ETFs holding about 3.73 million BTC. Meanwhile, estimates suggest that between 3.0 and 3.8 million BTC are permanently lost, representing approximately 15% to 19% of the total supply.
Factoring in institutional holdings and lost coins effectively removes roughly one-third of Bitcoin’s circulating supply from liquidity. This indicates that the actual supply available for short-term selling pressure is far less than the raw percentage suggests.
Similar considerations apply to Ether, where about 37% is held at a loss. Yet, a sizable portion of this supply is either staked or held in institutional reserves, which tend not to respond rapidly to short-term market swings. Over 40% of all Ether is locked in staking contracts, ETFs, or institutional reserves, thus reducing the amount of freely tradable Ether vulnerable to loss-driven selling.
Solana presents an even more pronounced case. While around 70% of circulating SOL is at a loss, over 73% is staked or held within institutional products, meaning most of the supply is effectively immobile. When SOL’s price dropped to $121, the proportion of supply at a loss contracted to 80%, a level previously seen when prices approached $20, demonstrating that these metrics are more sensitive to rapid price movements than structural sell-off.
Overall, the data suggests that the perceived threat of widespread loss-driven sell pressure is overstated. The true liquid supply that could respond to market stress is substantially smaller once staking, institutional holdings, and irrecoverable losses are accounted for.
This analysis underscores the nuanced nature of on-chain metrics, emphasizing the importance of considering structural holdings rather than raw supply figures when assessing market risk.