A dramatic 30% reduction in Bitcoin’s liquid supply over the past 18 months could trigger a significant price surge, according to a new study from Sygnum Bank. This development comes as institutional whale accumulation reaches record levels, setting the stage for a potential supply squeeze.
Key Supply Metrics Signal Growing Scarcity
Sygnum Bank’s June 2025 analysis reveals that nearly 1 million BTC have left exchanges since late 2023, representing approximately 5% of Bitcoin’s total supply. This mass exodus of coins from trading platforms typically indicates a shift toward long-term holding strategies, effectively reducing the available supply for active trading.
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Institutional Adoption Accelerates
The supply constraints coincide with increasing institutional adoption, as three U.S. states move to incorporate Bitcoin into their reserves. New Hampshire has already enacted legislation, with Texas expected to follow suit. This institutional momentum aligns with broader treasury adoption trends observed in Q1 2025.
Global Reserve Status Strengthens
Bitcoin’s growing appeal as a hedge against dollar weakness has intensified amid recent U.S. Treasury market volatility. The trend reflects mounting concerns over the U.S. dollar’s reserve currency status, pushing more investors toward alternative stores of value.
FAQ Section
What is causing Bitcoin’s supply squeeze?
The combination of institutional accumulation, exchange outflows, and increased long-term holding behavior has removed approximately 1 million BTC from active trading circulation.
How might this affect Bitcoin’s price?
Historical data suggests that significant reductions in liquid supply, combined with steady or increasing demand, typically lead to upward price pressure due to reduced selling pressure and increased competition for available coins.
What role are institutions playing?
Institutional adoption through state reserves, corporate treasuries, and investment products is creating sustained demand while simultaneously reducing available supply through long-term holding strategies.
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