Institutional Players Now Hold 30.9% of Bitcoin’s Circulating Supply

Over a third of Bitcoin’s circulating supply is now held by centralized treasuries, including centralized exchanges, exchange-traded funds, and governments. This significant shift highlights the growing influence of institutional players in the Bitcoin ecosystem. According to the recent report, over 30% of Bitcoin (BTC) circulating supply is now held by just 216 centralized entities across six categories: centralized exchanges, ETFs and funds, public companies, private companies, DeFi protocols, and governments. This consolidation of Bitcoin into institutional hands coincides with its rapid price appreciation—from under $1,000 in 2015 to over $100,000 today, suggesting that major institutions now view Bitcoin as a strategic, long-term asset.

Across nearly all categories, with the exception of private companies, the top three entities hold between 65% to 90% of the total assets, reflecting the outsized role of early movers, especially in the DeFi, public company, and ETF categories, in shaping the early trajectory of institutional Bitcoin adoption. The report also notes that over the past two years, Bitcoin balances on centralized exchanges have declined, which has frequently been mistaken for an imminent supply shortage. However, the majority of that BTC has shifted to ETFs and funds, especially U.S. spot ETFs. Since June 2021, the total BTC held by this spot trading sector has remained relatively stable, fluctuating between 3.9 million and 4.2 million BTC. This stability indicates that the decrease in exchange balances reflects a structural redistribution of custody rather than a reduction in overall supply. The increasing share held by ETFs signals greater adoption by TradFi, yet the total liquidity available to spot buyers has stayed largely consistent.

The report also highlighted that the creation of the U.S. Strategic Bitcoin Reserve has significantly boosted institutional confidence in Bitcoin as a sovereign-grade asset. Following the SBR announcement, public and private companies have significantly increased their Bitcoin purchases. The report concludes that with over 30% of Bitcoin’s circulating supply held by centralized entities, the market has undergone a structural shift catalyzed by long-term investments and strategic custody. While early adopters continue to dominate holdings, Bitcoin’s acceptance as a sovereign-grade asset—marked by the SBR—has boosted institutional confidence. Even as custody moves from exchanges to ETFs and other custodians, the overall supply available for spot trading has remained stable.

This significant shift highlights the growing influence of institutional players in the Bitcoin ecosystem, including governments, exchange-traded funds (ETFs), and public companies. The report reveals that these entities now control 30.9% of the total circulating supply of Bitcoin, marking a substantial milestone in the institutionalization of the cryptocurrency. The trend of institutional adoption is accelerating, with notable developments this week. Mercurity Fintech Holding Inc., a US-listed company, announced plans to raise $800 million to establish a long-term Bitcoin treasury reserve. This initiative aims to transition part of the company's corporate treasury into Bitcoin and integrate it into a blockchain-native digital reserve system. The move is part of a broader strategy to create a yield-generating, blockchain-aligned reserve structure that reinforces long-duration asset exposure and balance sheet resilience.

Meanwhile, Evertz Pharma, a German company, became the first in its region to officially hold strategic Bitcoin reserves. The company purchased an additional 100 BTC in May, worth roughly €10 million. Evertz Pharma began accumulating Bitcoin in December 2020 and has since allocated corporate profits to BTC, citing its scarcity, storage-free nature, and inflation hedge potential as superior to gold. The increasing institutional control over Bitcoin raises both opportunities and concerns. On one hand, it legitimizes Bitcoin as a strategic macro asset and integrates it into the global financial system. On the other hand, it challenges the original ethos of decentralization that underpins Bitcoin. The report highlights that over 75% of adjusted Bitcoin transfer volume now occurs through centralized exchanges, US spot ETFs, and regulated derivatives platforms, contrasting sharply with the asset’s early peer-to-peer (P2P) roots.

The growing institutional influence has led to declining volatility in Bitcoin, with annualized realized volatility decreasing since 2018. This stability, while beneficial for long-term investors, has also made Bitcoin less appealing to speculative traders. The integration of Bitcoin into traditional finance has made price action more stable and less volatile, which aligns with the preferences of institutional investors. The trend of institutional adoption is likely to continue, with more public companies and governments exploring Bitcoin as a strategic reserve asset. This shift could further embed Bitcoin within the global financial system, but it also risks centralizing control in a space designed to empower individuals over institutions. The concern is that institutional dominance contradicts Bitcoin’s founding ethos of decentralization, potentially undermining the network’s original vision.