Bitcoin’s Taproot Address Supply Declines by 3% Since January 2024: What’s Driving the Shift?
Bitcoin’s Taproot address supply has fallen by roughly 3% since January 2024, according to on-chain analyst Willy Woo. This decline has sparked debate across the crypto community, with experts divided over whether long-term holders (LTHs) are quietly selling or simply repositioning their funds amid rising concerns about quantum computing threats.
Bitcoin Housecleaning or Whale Sell-Off?
Data shared by Woo on X reveals that Taproot addresses—Bitcoin’s latest transaction format—have been trending downward since early 2024. The analyst explained that this shift might not indicate panic selling but rather “housecleaning” by early holders. These holders are moving BTC to more secure or custodial setups.
“What constitutes an ‘OG dump’ is simply BTC moving out of an address untouched for seven years,” Woo wrote. He added that on-chain data can sometimes misinterpret such activity as selling, when it often reflects reorganization or collateral posting.
Contrasting Opinions Among Analysts
Fellow analysts, including Charles Edwards of Capriole Investments, offered a different perspective. He argued that large-scale movements by early Bitcoin holders usually correlate with sell pressure. “We know this empirically,” Edwards said, referencing vivid on-chain charts showing hundreds of millions in old BTC moving in 2025.
However, others supported Woo’s more nuanced view. On-chain researcher Shanaka Anslem Perera pointed out that around 470,000 BTC—worth about $50 billion—has left dormancy this year. Still, much of this movement involved custody rotations and treasury placements, rather than outright market sales.
“The story is not capitulation,” Perera wrote. “Rather, it’s custody evolution, collateralization, and an institutional catcher’s mitt.”
Quantum Computing Fears Drive Custody Shifts
The timing of these Taproot address withdrawals coincides with growing unease over Bitcoin’s long-term resilience against quantum computing attacks. In July 2025, developers proposed “P2QRH,” a quantum-resistant address type aimed at protecting up to 4 million vulnerable BTC—roughly 25% of the supply—from future key exposure risks.
The urgency around quantum threats grew after Project Eleven launched its Q-Day Prize challenge in April. The project offered 1 BTC to anyone who could crack Bitcoin’s cryptography using Shor’s algorithm before April 2026. This experiment is designed to test whether real quantum hardware can threaten Bitcoin’s elliptic curve encryption and has reignited debate about how soon the network might face genuine cryptographic risks.
In response, hardware makers are also adapting. In October, Trezor announced the Safe 7 wallet, its first “quantum-ready” self-custody device, designed to protect users against future quantum attacks.
Conclusion
The decline in Bitcoin’s Taproot address supply reflects a complex interplay of factors. While some view it as potential selling pressure from early holders, others see it as strategic repositioning in response to emerging technological threats. As quantum computing advances, the crypto community’s focus on safeguarding Bitcoin’s security appears stronger than ever.
https://bitcoinethereumnews.com/bitcoin/bitcoins-taproot-supply-falls-3-since-2024-as-quantum-risk-fears-rise/