AI Summary:
Institutional buying is driving a significant reduction in Bitcoin’s liquid supply, potentially triggering demand surges and increased price volatility, according to Sygnum Bank’s June 2025 Monthly Investment Outlook.
The report highlights that Bitcoin’s liquid supply has decreased by 30% in the last 18 months, mainly due to growing institutional interest and the rise of Bitcoin acquisition channels like ETFs and corporate treasury programs. Since late 2023, exchange-held Bitcoin balances have dropped by roughly 1 million BTC.
“Bitcoin’s rapidly shrinking liquid supply is setting the stage for demand shocks and upward price volatility,” Sygnum stated.
Three U.S. States Endorse Bitcoin Reserves
Policy shifts are accelerating this momentum. Three U.S. states—including New Hampshire, which has passed legislation—are adopting Bitcoin reserve policies, with Texas anticipated to follow suit. Internationally, Pakistan’s government and the UK’s Reform Party (currently leading in polls) have also signaled plans to explore Bitcoin as a reserve asset.
While no official government Bitcoin purchases have been made yet, Sygnum emphasized the signaling impact of these moves. “Once sovereign-level acquisitions begin, they could substantially influence demand and market sentiment,” the bank noted.
Macroeconomic Factors Boost Bitcoin Appeal
Sygnum connects Bitcoin’s increasing attractiveness to macroeconomic pressures such as U.S. Treasury sell-offs and concerns over U.S. debt sustainability. These factors are driving investors toward safe-haven assets like Bitcoin and gold, both of which saw heightened demand in May 2025.
Volatility Trends Reflect Market Maturity
The report also points to evolving volatility trends in Bitcoin. Since June 2022, upward volatility has consistently exceeded downward swings—a sign, according to Sygnum, of growing institutional involvement and a maturing market.
“Over the last three years, upside volatility has persistently outpaced downside volatility,” Sygnum reported, indicating stronger fundamental demand.
Ethereum Gains Momentum from Institutional Interest
Sygnum further noted Ethereum’s (ETH) recent rebound, spurred by the Pectra upgrade. The enhancement has increased network revenues and rekindled institutional interest in Ethereum’s ecosystem, particularly in tokenization and Layer-2 solutions, as reported by Cointelegraph.
