Bitcoin Supply Shrinks 30%, Demand Shocks Loom: Sygnum
Bitcoin's circulating supply is rapidly tightening, with a 30% decrease in liquid supply over the past 18 months due to institutional adoption and the rise of Bitcoin acquisition vehicles like ETFs. Approximately 1 million BTC has been withdrawn from exchanges since late 2023, driven by funds issuing equity or debt for Bitcoin purchases. Geopolitical and fiscal uncertainties, including a weakening US dollar, are pushing investors toward cryptocurrencies. Three US states have approved legislation for Bitcoin reserves, with New Hampshire already enacting a law and Texas likely to follow. International interest is rising, with Pakistan's government and Reform UK exploring Bitcoin reserve strategies. Bitcoin's image as a safe-haven asset is strengthening amid US Treasury sell-offs. Upside volatility has outpaced downside volatility over the past three years, indicating market maturation. Ether is also regaining momentum following the Pectra upgrade, attracting interest from financial institutions.
