Bitcoin Supply Shrinks 93% as Institutional Demand Surges 635%

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 led analysts to warn 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 looking to buy in. Strategy now holds more Bitcoin than the US and Chinese governments combined, and its stash is almost twelvefold larger than that of the next-closest holder, Marathon Digital Holdings.

Institutional demand for Bitcoin has surged, with spot Bitcoin ETFs opening new gateways for pension funds, banks, and investment firms. BlackRock’s iShares Bitcoin Trust (IBIT) saw significant inflows in late May 2025, with $6.35 billion of inflows for the month. When institutions buy through spot ETFs, the underlying Bitcoin is moved into custodial cold storage, further tightening the liquid supply in the market. This surge in institutional demand adds another layer to the Bitcoin supply-and-demand imbalance, with even conservative banks now considering BTC a long-term hedge. Companies like Trump Media and Technology Group, GameStop, and Twenty One have also made substantial Bitcoin investments, further reducing the available supply.

The 2024 halving reduced miner rewards from 6.25 to 3.125 BTC, limiting new supply entering the market. However, a few players now control a large portion of all Bitcoin, sparking both bullish and critical takes. As of June 2025, daily issuance is 450 BTC, while Strategy alone buys more than that per week. Public wallets tied to Grayscale, Binance, and several ETF custodians now rank among the largest holders of BTC. In total, the top 100 addresses still control about 15% of the total supply. Critics warn that this creates Bitcoin ownership concentration, where power is consolidated in a small group of hands, challenging the original ethos of decentralization. Others argue it shows confidence, as these whales aren’t flipping BTC for quick profit; they’re holding for the long game.

One common misunderstanding is that Bitcoin will disappear from circulation. That’s not quite true. However, a Bitcoin liquidity crisis can occur when a significant portion of the supply is held offline, in cold wallets or ETFs, rendering trading inefficient. Already, onchain data shows that exchange balances are at their lowest levels in years. This can lead to more volatile price swings, both up and down, as small changes in demand hit a thin supply. As of early June 2025, the share of Bitcoin on exchanges has dipped below 11% of the total supply, the lowest level since early 2018, creating a “dry market” prone to larger price swings.

It’s already unfolding, just not all at once. You may not see a single explosive moment when Bitcoin “runs out.” But all signs point to a slow-burning BTC supply squeeze. From miners earning less to institutions buying more to whales refusing to sell, the pressure is building. Whether it triggers a price spike depends on one thing: new demand. If retail, corporate, and national buyers continue piling in, Bitcoin’s limited supply could create a feedback loop of rising prices and even greater demand. “Over the long term, Bitcoin on the balance sheet has proven to be extraordinarily popular,” Saylor said.

Scarcity was always part of Bitcoin’s core narrative, but now it’s being stress-tested in real time. The combination of shrinking supply, institutional hoarding, and diminishing miner rewards is pushing Bitcoin into a new phase. Whether you see it as a bullish supply shock or a concerning centralization trend, the dynamics are clear: There’s less Bitcoin to go around. And this isn’t just about math; it’s about perception. 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 matters: Interest rates remain high globally, governments are cautious with Bitcoin due to regulatory uncertainty and environmental, social, and governance (ESG) concerns, and gold is still favored by central banks as a reserve asset. So, will Bitcoin dethrone gold as the premier store of value? Not yet. But 2025 marks the first time in history where Bitcoin’s scarcity profile is tighter, its supply dynamics more aggressive, and its adoption narrative broader than gold’s. Investors, regulators, and average users alike should watch the space closely. If Saylor and other whales keep accumulating 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.