Bitcoin Supply on Exchanges Drops Below 15% Amid Institutional Demand Surge

Bitcoin's supply on exchanges has dropped below 15% for the first time since 2018, indicating a potential supply shock as institutional demand from exchange-traded funds (ETFs) continues to grow. This significant reduction in available Bitcoin on exchanges suggests a shift towards long-term holding and accumulation, as investors transfer their holdings to cold storage or self-custody wallets. This trend is further supported by the diminishing supply of Bitcoin on over-the-counter (OTC) desks, which are also experiencing historic lows in their BTC reserves.

The decreasing supply of Bitcoin on exchanges and OTC desks can amplify price surges as demand outstrips supply. This scarcity is a result of strong institutional demand, which is evident in the consecutive inflows into spot Bitcoin ETFs. Over the past 15 days, more than $4.7 billion in capital has moved into spot Bitcoin ETFs, highlighting the growing institutional interest in Bitcoin. Maintaining the $100,000 psychological support level will be critical for securing Bitcoin’s upside and avoiding significant downside volatility. A potential correction below this level could liquidate over $6.42 billion worth of cumulative leveraged long positions across all exchanges.

Numerous analysts predict that Bitcoin dropping below $100,000 is becoming less likely, setting optimistic targets for the rest of 2025 ranging from $140,000 to $150,000. This optimism is fueled by the strong institutional demand and the shrinking supply of Bitcoin on exchanges and OTC desks. The resilience of Bitcoin above the $100,000 mark is a testament to the growing confidence in the cryptocurrency market and its potential for long-term growth.