Key Takeaways:
- The supply of Bitcoin on exchanges is projected to be exhausted in nine months due to a 50% reduction in Bitcoin issuance (halving) and substantial acquisitions by U.S. Bitcoin ETFs.
- Current data shows Bitcoin reserves at a three-year low, with daily outflows of approximately 7,142 bitcoins, driven by $500 million daily inflows to Bitcoin Spot ETFs.
- Despite a broader market downturn, increased institutional interest and a potential supply squeeze could drive Bitcoin prices higher post-halving.
The supply of Bitcoin on cryptocurrency exchanges is predicted to exhaust within nine months, attributed to the imminent 50% reduction in Bitcoin issuance and ongoing acquisition by U.S. Bitcoin exchange-traded funds (ETFs).
According to an analysis, the post-halving circumstances combined with persistent demand from U.S. Bitcoin ETFs could lead to the depletion of Bitcoin reserves on exchanges.
EXCHANGES TO RUN OUT OF BITCOIN IN 9 MONTHS ~ BYBIT REPORT
— BSCN (@BSCNews) April 16, 2024
“Bitcoin reserves in all centralized exchanges have been depleting faster…”
– A report from @Bybit_Official has made an incredible claim about the dwindling supply of $BTC held in exchange reserves in its latest… https://t.co/W6Wb9D8uXR pic.twitter.com/LNGScmb1Mc
This projection is based on current trends observed in centralized exchange reserves, which have seen a rapid decrease.
“Bitcoin reserves in all centralized exchanges have been depleting faster. With only 2 million Bitcoins left, if we assume a daily inflow of $500 million to Bitcoin Spot ETFs, the equivalent of around 7,142 bitcoins will leave exchange reserves daily, suggesting that it will only take nine months to consume all of the remaining reserves.” the Bybit report explained.
Data from CryptoQuant indicates that Bitcoin reserves on centralized exchanges dipped to a near three-year low of 1.94 million BTC as of April 16.
#Bitcoin Faces Unprecedented Supply Squeeze as Exchange Reserves Plummet https://t.co/469et1Jzrj
— Bitcoin.com News (@BTCTN) April 16, 2024
In the face of this market correction, expectations are that Bitcoin prices might rebound in the period leading up to and following the halving due to the anticipated supply squeeze, potentially driving the price to new heights.
The report also highlights a growing institutional interest in Bitcoin.
Despite a slowdown in weekly inflows to Bitcoin spot ETFs since March, significant amounts have been amassed by these ETFs, totaling over $52.9 billion in Bitcoin, with more than $12.7 billion in net flows since their inception.
Bitcoin reserves on all centralized exchanges have been depleting faster. Supply could run out on exchanges in 9 months.
— Oliver Isaacs (@oliverzok) April 16, 2024
With only 2 million Bitcoins left, if we assume a daily inflow of $500 million to Bitcoin Spot ETFs, the equivalent of around 7,142 bitcoins will leave… pic.twitter.com/JB4tkvvrSl
Moreover, Bitcoin investor sentiment has shown a marked increase in allocation, with institutional investors now allocating an average of 40% of their total assets to Bitcoin, and retail investors allocating around 24%.
The report noted an increase in exposure to Bitcoin among both crypto-native firms and traditional institutions, facilitated by ETFs and equivalent stocks like MicroStrategy.
Bitcoin Exchanges Facing Supply Squeeze
— Kashif Raza (@simplykashif) April 16, 2024
Exchanges to Run Dry in 9 Months
-> Only 2 million bitcoins left.
->Daily inflow of $500 million to spot bitcoin ETFs.
->Approx. 7,142 bitcoins leaving exchange reserves daily. pic.twitter.com/xr3XZGB5CE
It also suggested that more institutions are likely to invest in Bitcoin as market familiarity and regulatory landscapes evolve.
This forward-looking analysis underscores the dynamic and rapidly evolving nature of the cryptocurrency market, where supply constraints and institutional demand are expected to significantly influence Bitcoin’s availability and price trajectory in the near term.
About The Author
Fleming Airunugba, a seasoned Web3 and crypto content expert, leverages his deep understanding of blockchain technology to bring the latest and most impactful news to the crypto community.
With a knack for engaging storytelling and strategic content creation, Fleming is dedicated to educating and inspiring his audience with insightful analysis on cryptocurrencies, NFTs, and the future of digital finance.
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