Bitcoin Supply on Exchanges Drops 15% as Companies Accumulate

Bitcoin reserves on cryptocurrency exchanges have dropped to their lowest level in more than six years, as publicly traded companies ramp up their accumulation of the digital asset following the US presidential election. According to Fidelity Digital Assets, the supply of Bitcoin on exchanges has fallen to roughly 2.6 million BTC, the lowest since November 2018. This decrease is attributed to public company purchases, with more than 425,000 BTC moving off exchanges since November. This trend is often viewed as a signal of long-term investment rather than short-term trading.

Over the same period, publicly-traded companies acquired nearly 350,000 BTC. Fidelity Digital Assets, a subsidiary of Fidelity Investments, noted that the significant corporate Bitcoin purchases are driven by Strategy, a business intelligence firm-turned-Bitcoin bank co-founded by Michael Saylor. Since November, Strategy has acquired 285,980 BTC, accounting for 81% of the approximately 350,000 BTC purchased by publicly traded companies. Strategy’s latest purchase of 6,556 BTC was disclosed on April 21.

Outside the United States, publicly traded companies in Asia have adopted a similar Bitcoin treasury strategy. Japan’s Metaplanet and HK Asia Holdings have increased their Bitcoin allocations. Metaplanet currently holds 5,000 BTC, with CEO Simon Gerovich aiming to double that amount this year. Meanwhile, HK Asia Holdings announced plans to raise roughly $8.35 million to potentially increase its Bitcoin reserves.

This trend of public companies purchasing Bitcoin is expected to accelerate, further reducing the available supply on exchanges and potentially influencing the cryptocurrency's market dynamics. The reduction in supply on exchanges is a significant indicator of the growing institutional interest in Bitcoin. As public companies increasingly allocate funds to Bitcoin, the cryptocurrency's scarcity on exchanges is likely to drive up its value. This shift in supply dynamics underscores the maturing of Bitcoin as an asset class, with institutional investors playing a pivotal role in its adoption and valuation.