Bitcoin News Today: Institutional and Retail Demand Outpaces Bitcoin's Shrinking Supply, Fueling Bull Run

Bitcoin's ongoing bull market has intensified as institutional and retail demand outpaces new supply, with key indicators suggesting the rally is far from its peak. The April 2024 halving event, which cut miner rewards in half, has accelerated supply constraints, while U.S. spot Bitcoin ETFs and corporate holdings have absorbed over 1.13 million BTC-nearly 5.7% of the circulating supply-by mid-2025. This dynamic, combined with a 30% decline in liquid Bitcoin supply over 18 months, has created a tightening market environment.

Institutional demand has surged, with corporate treasuries adding 140,600 BTC in July–August 2025 alone, a volume nearing annual miner output of 164,000 BTC. ETFs, including BlackRock's IBIT, have drawn $80 billion in inflows by mid-2025, while cash-and-carry arbitrage strategies-leveraging CME Bitcoin futures-have further stabilized liquidity without directly impacting spot supply. Meanwhile, long-term holders (LTHs) have absorbed 1.75 million BTC in 2024, with their dominance at 64.4% of the circulating supply, signaling sustained accumulation.

Retail participation has also surged, with wallets holding <100 BTC accumulating 19,300 BTC/month-outpacing miner issuance by 43%-while LTH net unrealized profit/loss (NUPL) remains below historical euphoria levels, indicating limited profit-taking. Exchange reserves have dropped 21% since 2024, with 600,000 BTC withdrawn, yet stable transfer volumes suggest coins are being moved to cold storage rather than liquidated. Over-the-counter (OTC) platforms, however, have seen a 105% year-on-year increase in balances, now holding 400,000 BTC.

Market liquidity has improved, with USD-denominated 2% market depth rising 61% in 2024, despite BTC-denominated metrics declining 26%. Top exchanges like CEX.IO and Kraken now control 57% of the market depth, up from 53% at year-end 2023. U.S. exchanges temporarily dominated liquidity post-elections in 2024, a trend analysts expect to persist in 2025 as trading activity concentrates on U.S. hours.

Price action reflects robust demand. Bitcoin reached $122,200 in October 2025, within 3% of its August peak, triggering over $330 million in short liquidations. Historical patterns, such as the "Uptober" bullish trend, suggest further upside, with Standard Chartered analysts projecting $135,000 by year-end and $200,000 by late 2025. Institutional adoption, including state-level Bitcoin reserves in Texas and New Hampshire, adds to the bullish narrative.

While some caution a potential supply shock as exchange-held BTC dips below 11% of total supply, most experts argue the current tightening is a controlled build-up rather than a sudden collapse. Glassnode notes that LTH absorption of 13,400 BTC/month-exceeding miner issuance-creates measurable pressure but not an immediate shock. The next halving in 2028, expected to reduce supply further, may amplify existing trends.

[1] Bitcoin Supply Shock is Unlikely in 2025 - blog.cex.io (https://blog.cex.io/ecosystem/bitcoin-supply-shock-34857)

[2] Experts Cite Supply Shock as Major Driver Behind Bitcoin's Price Surge - The Currency Analytics (https://thecurrencyanalytics.com/altcoins/experts-cite-supply-shock-as-major-driver-behind-bitcoins-price-surge-146567)

[3] Bitcoin's October 2025 Surge: A New Era Dawns as BTC Nears All-Time Highs - Financial Content (https://markets.financialcontent.com/talkmarkets/article/breakingcrypto-2025-10-3-bitcoins-october-2025-surge-a-new-era-dawns-as-btc-nears-all-time-highs)

[4] Bitcoin Supply Shrinks 30% - Will BTC Price See an Institutional-Driven Rally? - Crypto News (https://cryptonews.com/news/bitcoin-supply-shrinks-30-will-btc-price-see-an-institutional-driven-rally/)

[5] Bitcoin in September 2025: Stabilization, Institutional Investments and ETF Withdrawals - Dapp Expert (https://dapp.expert/news/en_bitcoin-in-september-2025-stabilization-institutional-investments-and-etf-withdrawals-1757808459-52617)

[6] Bitcoin Supply Tightening As Wide Base of Investors Buying $2.359B BTC Per Month - The Daily Hodl (https://dailyhodl.com/2025/07/14/bitcoin-supply-tightening-as-wide-base-of-investors-buying-2359432720-in-btc-per-month-glassnode/)

[7] Analyst Sees Major Bitcoin Breakout as Retail and Institutions Stack Relentlessly - CoinDesk (https://www.coindesk.com/markets/2025/08/31/analyst-sees-major-bitcoin-breakout-as-retail-and-institutions-stack-relentlessly)

[9] Bitcoin Supply Is Shrinking: Will Saylor's Relentless BTC Buying Cause a Supply Shock? - Coin Telegraph (https://cointelegraph.com/explained/bitcoin-supply-is-shrinking-will-saylors-relentless-btc-buying-cause-a-supply-shock)