Bitcoin Supply Shrinks 93% as Halving and Institutional Demand Intensify

Bitcoin’s supply is rapidly diminishing, with 93% of the total 21 million coins already mined. The network’s fourth halving in April 2024 reduced miner rewards by half, further constricting the daily influx of new coins. This scarcity is exacerbated by the fact that approximately 70% of the Bitcoin supply has remained unmoved for at least a year, indicating a significant reduction in liquidity. The combination of these factors has analysts warning of a potential supply shock, where the available Bitcoin on exchanges becomes insufficient to meet demand, potentially triggering sharp price movements.

Michael Saylor, the executive chairman of Strategy, has been at the forefront of this trend. Since 2020, he has transformed the software company into a major Bitcoin holding entity, accumulating more than 2.75% of the total Bitcoin supply, or approximately 582,000 BTC. This aggressive buying strategy has fueled concerns about a potential Bitcoin supply crisis, as fewer coins available on exchanges mean less liquidity, particularly for new entrants or retail traders.

Institutional demand for Bitcoin has surged, with spot Bitcoin ETFs opening new avenues for pension funds, banks, and investment firms. BlackRock’s iShares Bitcoin Trust (IBIT) saw significant inflows in late May 2025, with $6.35 billion in net inflows for the month. This institutional buying pulls coins off exchanges, further tightening the liquid supply. Additionally, companies like Trump Media and Technology Group, GameStop, and Twenty One have made substantial Bitcoin investments, adding to the demand.

The 2024 halving reduced miner rewards from 6.25 to 3.125 BTC, limiting the new supply entering the market. However, a few large players now control a significant portion of all Bitcoin, sparking both bullish and critical views. Strategy, along with other major holders like Grayscale and Binance, controls a substantial slice of the Bitcoin supply, raising questions about decentralization. Critics argue that this concentration of ownership challenges the original ethos of Bitcoin, while others see it as a sign of long-term confidence in the asset.

Despite the concerns, Bitcoin’s scarcity is being tested in real time. The combination of shrinking supply, institutional hoarding, and diminishing miner rewards is pushing Bitcoin into a new phase. If institutional inflows continue and everyday users struggle to buy even small amounts without premiums, a bullish supply shock may emerge. However, the macro backdrop, including high interest rates, regulatory uncertainty, and the continued favor of gold by central banks, suggests that Bitcoin’s journey to becoming the premier store of value is still uncertain.

Investors, regulators, and average users should closely monitor the situation. If Saylor and other whales continue to accumulate Bitcoin and demand keeps rising, the real question might not be if there’s a supply shock, but how high Bitcoin might go when it hits. The dynamics are clear: there’s less Bitcoin to go around, and the market is adjusting to this new reality.