Definition ∞ Illiquid supply growth refers to an increase in the amount of a digital asset that is not actively traded on exchanges or easily accessible for sale. This often indicates that assets are being moved into cold storage, staked, or held by long-term investors. A rising illiquid supply suggests reduced selling pressure and potential future scarcity. It signals a shift towards long-term holding.
Context ∞ Illiquid supply growth is a significant on-chain metric closely watched by market analysts to gauge long-term investor sentiment and potential price trends. News often highlights periods of increased illiquid supply as a bullish indicator for asset valuations. A critical future development involves how institutional adoption and the expansion of staking protocols continue to influence this metric, potentially creating sustained supply constraints in the market.
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