Institutional accumulation is driving a sharp contraction in Bitcoin’s liquid supply, potentially triggering demand shocks and significant upside price volatility, according to Sygnum Bank’s June 2025 Monthly Investment Outlook.
The report notes that Bitcoin’s liquid supply has fallen by 30% over the past 18 months, primarily due to growing institutional demand and the expansion of Bitcoin acquisition vehicles such as ETFs and corporate treasury strategies. Since late 2023, exchange-held balances have declined by approximately 1 million BTC.
“Bitcoin’s fast-shrinking liquid supply is creating the conditions for demand shocks and upside volatility,” Sygnum stated.
Three U.S. States Approve Bitcoin Reserves
Momentum is being further fueled by policy developments. Three U.S. states — including New Hampshire, which has already passed legislation — are adopting Bitcoin reserve strategies, with Texas expected to follow. Internationally, Pakistan’s government and the Reform UK Party (currently leading in UK polls) have also announced intentions to explore Bitcoin as a reserve asset.
Though no formal government Bitcoin purchases have occurred yet, Sygnum highlighted the signaling effect of such legislation. “When sovereign-level acquisitions begin, they could significantly impact demand and market sentiment,” the bank said.
Macro Conditions Favor BTC Accumulation
Sygnum links Bitcoin’s rising appeal to macroeconomic stressors, including U.S. Treasury sell-offs and concerns around U.S. debt sustainability. These trends are pushing investors toward safe-haven assets such as Bitcoin and gold, both of which saw elevated demand in May 2025.
Volatility Profile Signals Market Maturity
The report also flagged shifting volatility patterns in Bitcoin. Since June 2022, upside volatility has consistently outpaced downside volatility — a sign, Sygnum says, of growing institutional participation and market maturation.
“Over the past three years, upside volatility has consistently exceeded downside volatility,” Sygnum reported, indicating stronger structural demand.
Ethereum Rebounds on Institutional Interest
Sygnum also noted a resurgence in Ethereum (ETH) performance following the Pectra upgrade. The upgrade has boosted network revenues and renewed institutional interest in Ethereum’s ecosystem, especially for tokenization use cases and Layer-2 solutions, according to Cointelegraph.
