Bitcoin Supply Squeeze Looms as Long-Term Holders Accumulate Faster Than Mining

Bitcoin’s liquid supply is tightening as long-term holders accumulate faster than new coins are mined. This trend is driven by a structural shift in Bitcoin’s available supply, where more coins are being transferred into the hands of long-term holders, reducing the pool of Bitcoin available for active trading. This dynamic is confirmed by data showing that Bitcoin addresses holding coins for 10 years or longer, known as “ancient” wallets, are increasing in value at a faster rate than new BTC is mined. This trend points toward a possible supply squeeze, where rising demand meets reduced circulating supply, historically leading to upward price pressure, especially when combined with strong ETF inflows and favorable macro conditions.

In another development, central limit order books (CLOBs) are emerging as the preferred model for decentralized crypto trading, offering both efficiency and transparency. Hyperliquid, a rising CLOB-based exchange, now controls a significant portion of the on-chain perpetuals market. Unlike automated market makers, CLOBs provide order-by-order pricing, which appeals to sophisticated traders. However, building a high-performance on-chain CLOB requires robust, high-speed infrastructure. Alternative platforms like Bullet and Fogo are also emerging, aiming to match Hyperliquid’s performance while exploring new trade-offs in decentralization and network alignment.

The growing prominence of stablecoins is also a key trend, with major fintech and retail players entering the space. Stripe now offers an end-to-end platform that supports stablecoin payments, wallet integration, and fiat settlements. Circle, the issuer of USDC, continues to expand its global network. Companies such as Amazon, JPMorgan, and Robinhood are exploring or launching stablecoin solutions to reduce transaction costs and enhance working capital management. While some stablecoins may operate within closed ecosystems, others are being designed for broader public use. In parallel, the stablecoin market is projected to grow significantly, potentially exceeding $250 billion and reaching up to $3 trillion by 2030, according to experts.

Market participants are increasingly evaluating Layer 1 blockchains based on revenue, rather than focusing solely on chain activity or transaction volumes. This shift mirrors the evolution of stock analysis, which moved from price-to-sales to price-to-earnings models. Messari data shows that project valuations are more closely linked to protocol revenue than to raw on-chain activity. Emerging applications like Pump.fun, a meme coin launch platform, have rapidly become one of the highest revenue-generating apps in crypto. Based on current annualized earnings, its valuation is estimated between $5 billion and $9 billion. Some bullish projections suggest it could reach as high as $20 billion. However, its long-term success may depend on how much value it returns to users through community incentives such as airdrops or token buybacks. Meanwhile, new platforms like Plasma, Harmonics, and Liminal are also gaining traction, offering yield strategies and Bitcoin-based DeFi services, as developers and users increasingly diversify beyond Ethereum and Solana.

Ask Aime: What's driving the surge in Bitcoin's price amid a tightening supply and increasing demand?