Bitcoin Supply Dynamics Shift With 17% Illiquid, $120 Billion Inflows Expected By 2025

Bitcoin's supply dynamics are undergoing a significant shift, with a historic inversion in its supply mechanics. According to Fidelity Digital Assets, 550 BTC per day are now classified as “ancient,” meaning coins untouched for over 10 years, surpassing the daily mining rate of 450 BTC. This trend indicates that over 17% of the total BTC supply is now illiquid, and this figure could surge to 30% by 2026. Ancient BTC holders rarely sell, with net outflows occurring less than 3% of the time. Even after significant events like the 2024 election, long-term wallets showed only brief activity. This growth in illiquid supply signals firm conviction despite price volatility, laying the groundwork for what analysts call a structural supply shock.

On the demand side, asset manager Bitwise estimates that inflows into Bitcoin will reach $120 billion by 2025, growing to $300 billion in a base case and $426 billion in a bullish scenario. This could absorb over 4 million BTC, nearly 19% of the total capped supply. Public companies and pension funds are slowly increasing their BTC exposure, while US states and cities are exploring treasury allocations. Advisors on major platforms now offer 1–3% BTC model portfolios. Despite $35 billion in sidelined interest due to compliance hesitations at firms, the institutional tide is shifting. With these players collectively managing over $60 trillion, even small allocations have significant implications.

Technically, Bitcoin is consolidating at $104,600 on the 2-hour chart, with price action tightening along a rising trendline from the June 5 low. The 50-period EMA is sloping down at $105,381 and has been rejecting upside moves. The MACD lines are flat below zero, indicating a potential breakout. Levels to watch include support at $104,000 and $103,431, and resistance at $105,600-$105,800, with higher levels opening up at $106,658 and $107,748. Longs look to confirm a breakout above $105,600 to $106,658 and $107,748 with a stop under $104,000, while shorts below $103,400 to $102,200 and $100,449. Institutional flows are rising, and old supply is locking up BTC, setting the stage for potential price movements.