Since December 2024, Bitcoin’s UTXO count has shown a steady decline. This trend is not simply due to lower transaction volumes but is closely tied to wallet restructuring through OTC deals by whales and institutional investors. These entities are consolidating multiple UTXOs into fewer addresses, increasing their custody holdings and reorganizing the on-chain structure toward a “fewer & bigger” model.
Following the approval of U.S. spot ETFs, institutional demand has continued to grow. However, Bitcoin held on exchanges keeps flowing into custody wallets. This signals that large holders are securing assets away from exchanges for long-term storage, contributing to the ongoing decline in UTXO count.
Retail investor participation also remains muted in this cycle. In previous bullish phases, active retail inflows led to increased UTXO counts through higher transaction volumes. This time, retail inflows are subdued, and the number of newly created UTXOs remains stagnant.
Looking ahead, whales and institutions will likely continue consolidating assets into custody solutions. However, if the market enters a strong bullish phase, increased inflows from short-term investors could lead to a rise in exchange activity and UTXO counts. This could signal more speculative trading, potentially increasing future sell pressure.
Nevertheless, key on-chain indicators still support a positive outlook. Long-term holders continue to accumulate, institutional transfers persist, and exchange inflows remain moderate compared to previous market peaks. These factors suggest Bitcoin retains strong potential for further long-term growth.
Written by Avocado_onchain
