Bitcoin Supply Crunch Deepens as Institutions Tighten Their Grip

Bitcoin’s available supply is drying up fast, setting the stage for potential market turbulence, according to Sygnum Bank’s latest outlook.

The June report points to a sharp 30% drop in liquid BTC over the past year and a half, largely fueled by institutional accumulation.

Exchange-traded funds, corporate treasuries, and Bitcoin-focused financial products have been steadily pulling coins from exchanges. This trend, seen as bullish, has removed about 1 million BTC since late 2023, reducing day-to-day liquidity and increasing the risk of demand-driven price swings.

Adding fuel to the fire, global economic instability and weakening confidence in the U.S. dollar are pushing investors toward alternative assets. Bitcoin, along with gold, is increasingly viewed as a hedge against fiscal uncertainty and rising debt.

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Meanwhile, regulatory shifts are underway. Three U.S. states have moved toward holding Bitcoin reserves, with New Hampshire already passing legislation. International interest is growing too—Pakistan and Reform UK have both floated similar proposals, which Sygnum says could significantly impact demand once implemented.

On the volatility front, Bitcoin has shown signs of maturity. Since mid-2022, price spikes to the upside have outpaced downward moves—an encouraging signal for long-term bulls.

Sygnum also highlighted renewed momentum in Ethereum. The recent Pectra upgrade has reignited institutional interest, especially in tokenization projects building on Ethereum’s core and Layer-2 infrastructure.

As institutional adoption accelerates and supply thins, Sygnum suggests the next wave of demand could come with sharp price moves—and fewer coins to meet it.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.