- Bitcoin’s supply on exchanges is dwindling.
- Demand from institutional investors is on the rise.
- Analysts say the supply squeeze is a recipe for a Bitcoin price bump.
It’s tick, tock for Bitcoin’s supply clock.
The crypto’s available supply is shrinking as investors have withdrawn Bitcoin currently worth about $504 billion from exchanges in the last five years.
Consequently, Bitcoin’s supply on exchanges has fallen to a seven-year low, according to data from CryptoQuant.
Meanwhile, institutional interest from Wall Street and beyond has pumped demand for the asset.
Market analysts say the situation may trigger a supply shock that could catapult Bitcoin’s price to a new all-time high.
“We can see this squeeze higher and there is an incentive to keep prices high,” Markus Thielen, co-founder of crypto market research platform 10x Research, said on investor Scott Melker’s podcast this week.
The analysis highlights Wall Street’s growing demand for the top crypto. Market watchers expect President Donald Trump’s pro-crypto policies to fuel that demand, potentially pushing the price of Bitcoin to $200,000 or higher.
‘National priority’
Last week, Trump issued an executive order that called the US crypto ecosystem’s growth a “national priority.”
Bitwise chief investment officer Matt Hougan said the news was overwhelmingly bullish for crypto and that it would bring trillions of dollars of investor funds to the market.
In December, Hougan predicted Bitcoin’s price could reach $200,000 in 2025 echoing the sentiment of Standard Chartered and Bernstein.
This week, he said the prediction “may turn out to be conservative.”
ETF ecstasy
Wall Street heavyweights muscled into crypto like never before in 2024, riding the wave of US spot Bitcoin exchange-traded funds run by the likes of BlackRock.
These funds amassed $107 billion in assets under management in their first year, a record for any ETF launch.
The investment vehicle proved a black hole for Bitcoin’s supply, drawing in more than 5% of the asset’s total supply and the buying pressure is relentless.
While single-asset ETFs made a splash last year, analysts expect the market to broaden to include multi-asset crypto ETFs in 2025.
Coalition Greenwich, S&P Global’s financial analytics arm, said in a new report that asset managers are keen on multi-asset crypto ETFs which would offer exposure to a basket of cryptocurrencies including Bitcoin.
Company stockpiles
Bitcoin’s supply has also been locked up by companies who hold it in their treasuries.
“We are definitely going to see more institutional adoption adding to the balance sheet,” Melker said on his podcast.
Last year, software company MicroStrategy continued to top up its Bitcoin treasure trove. Its stockpile now amounts to over 470,000 of the cryptocurrency.
Other firms, like Boyaa Interactive and Genius Group have amassed similar stockpiles, but not to the same extent.
More may follow.
Take the Free Enterprise Project. The Washington-based advocacy group has embarked on a campaign to convince Big Tech firms like Amazon and Meta to follow in MicroStrategy’s footsteps and hold Bitcoin.
Crypto market movers
- Bitcoin is down 0.5% over the past 24 hours to reach $104,547.
- Ethereum rose 2.4% to $3,264.
What we’re reading
- Almost half of Trump memecoin buyers are first-time Solana users: Chainalysis ― DL News
- Ethereum Founder Vitalik Buterin’s NFT Choice Spurs Talk of ‘Wartime Mode’ ― Unchained
- 8 big moments you missed yesterday ― Milk Road
- Obol Collective, Focused on Decentralizing Ethereum Staking, Nears Token Airdrop Launch ― Unchained
- Kidnapped co-founder of Ledger released as French police hunt for perpetrators ― DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.
