Bitcoin Supply Plummets as Institutional Buyers Fuel Potential Price Surge

Bitcoin reserves on cryptocurrency exchanges have reached their lowest point since 2018, signaling a potential supply shock as institutional investors ramp up their buying.

The total reserves dropped to 2.35 million BTC by January 13, a sharp decline linked to consistent accumulation by large-scale players, according to CryptoQuant.

This reduced supply aligns with increasing activity from hedge funds, which are reportedly leveraging the market dip to expand their crypto portfolios. Bitwise’s research head, André Dragosch, noted a rising correlation between hedge fund performance and Bitcoin, suggesting a stronger commitment to the asset.

A supply squeeze could be on the horizon, with demand outpacing supply. In December, U.S. Bitcoin ETFs purchased nearly triple the amount of Bitcoin mined, pushing the cryptocurrency to a record $108,300. However, analysts caution that low trading volumes may hinder Bitcoin’s climb above the critical $100,000 mark in the short term.

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The broader crypto market reflects similar stagnation, with trading activity dipping to a two-month low. Analysts remain cautiously optimistic, projecting that macroeconomic trends, like an anticipated surge in global liquidity, could drive Bitcoin to new highs, potentially surpassing $150,000 by late 2025.

Alexander Zdravkov