Since 2024, the supply of Bitcoin has decreased by 20-30% on exchanges and over-the-counter trading platforms.
Bitcoin [BTC] remained above $100,000 for nearly four weeks, but the massive buying wave for the asset may not end soon amid an impending supply crisis.
With the fear of missing out and the immense demand from Bitcoin’s corporate treasury bonds, the underlying supply may not meet the demand.
Intensifying Bitcoin supply crisis
On trading platforms, which are very popular among retail traders, Bitcoin reserves have decreased by over 21% from 3.2 million to 2.5 million Bitcoin since early 2024.
Bitcoin supply
Source: Crypto Quant
Interestingly, this continuous decline coincided with the launch of the spot Bitcoin ETF in the United States. Over-the-counter trading desks (OTC), which are another supply point for most institutions, recorded a persistent deficit.
During the same period, the over-the-counter Bitcoin balance dropped from over 211,000 Bitcoin to 135,000 Bitcoin. This translates to a decrease of 36%, which is a much larger decline than the change in exchange reserves.
Bitcoin
Source: Crypto Quant
The continuous decline in supply can be interpreted as a bullish incentive, especially with strategic companies and their imitators flocking to Bitcoin.
However, these figures, namely the over-the-counter trading balance and the exchange reserves, are not static and may receive new inflows of Bitcoin to replenish the supply from sellers.
However, the growing global liquidity may be another critical driving force for the asset. According to Jamie Coutts, Senior Analyst at Real Vision, the value of Bitcoin could rise significantly if liquidity increases.
"While Bitcoin's sensitivity to the Global Liquidity Index (GLI) decreases over time, with every additional 1% of liquidity added to the system, we expect the price of Bitcoin to rise by over 20%."
Bitcoin
Source: Jamies Coutts/X
Coutts noted that the Global Liquidity Index (GLI) rose by 2% in the second quarter, which may have impacted the 40% recovery of Bitcoin.
Andre Dragush from Bitwise supported this liquidity-based hypothesis, noting that global money supply has reached a three-year high, which may boost Bitcoin's price.
Regarding price forecasts, the bulls on Polymarket placed the highest odds (76%) on the $120,000 level. Other price targets for 2025 included $130,000 and $150,000, with probabilities of 56% and 36%, respectively.
