Institutions and Corporations Claim 28% of Bitcoin Supply, Altering Market Dynamics

Bitcoin’s illiquid supply has reached a record high of 14.3 million BTC, accounting for over 72% of the cryptocurrency’s total circulating supply of 19.92 million. This surge reflects sustained accumulation by long-term holders (LTHs) and institutional investors, signaling reduced sell-side pressure and a structural shift in market dynamics. Data from Glassnode indicates that the number of BTC held for over seven years without trading has increased by 422,430 coins since January 1, 2025, underscoring a growing preference for long-term storage over short-term trading [1]. Fidelity projects that LTHs and corporate treasuries could lock up over 6 million BTC by 2025, tightening supply and potentially amplifying price resilience [2].

Whales and large institutional players are absorbing newly mined BTC at unprecedented rates. According to on-chain analytics, holders with 100–1,000+ BTC are acquiring nearly 300% of the annual issuance, while exchange outflows have plunged below -150% year-on-year. This trend highlights a preference for self-custody and long-term investment, reducing liquidity available for trading and increasing market concentration among major holders [3]. Glassnode data also shows that the yearly absorption rate by exchanges has dropped to historically low levels, further reinforcing the shift toward institutional and corporate control of Bitcoin’s supply [4].

Corporate and institutional consolidation of Bitcoin holdings has accelerated in 2025. Strategic reserves managed by publicly traded companies and ETF issuers have grown 30% year-to-date, reaching 2.88 million BTC by late August 2025. This includes entities like Texas, which recently approved a state-level Bitcoin reserve with no cap on holdings, and corporations such as GameStop, which raised $2.7 billion to bolster its BTC allocation [5]. Fidelity’s analysis suggests that combined institutional and corporate holdings could exceed 28% of Bitcoin’s maximum supply by 2025, a level not seen since the 2021 bull market [6].

The tightening liquidity environment has created a bullish backdrop for Bitcoin, though volatility persists. Despite a 15% pullback from August’s $124,000 peak, illiquid supply continued to rise, adding 20,000 BTC in a single month. Analysts attribute this to growing confidence in Bitcoin as a store of value, with institutional demand outpacing retail participation. Technical indicators also suggest potential for a $100,000 price target by May 2025, supported by a breakout from a descending wedge pattern and a falling wedge absorption rate [7]. However, macroeconomic headwinds, including U.S. manufacturing slowdowns and geopolitical tensions, could delay momentum if retail demand fails to materialize [8].

Looking ahead, Bitcoin’s correlation with global liquidity metrics—particularly M2 money supply—remains a key focus. Historical data shows a 0.94 correlation between Bitcoin’s price and global liquidity expansions, with major bull markets aligning with periods of rapid monetary easing. As of February 2025, global M2 had grown from $102 trillion to $107 trillion, a 3.8% increase, suggesting continued favorable conditions for risk assets. However, analysts caution that Bitcoin’s internal liquidity cycle, including its MVRV Z-score, currently indicates a neutral valuation, leaving room for further appreciation before reaching overbought territory [9].