The cryptocurrency landscape is witnessing a significant shift as Bitcoin’s available coins for trading have sharply declined. This alteration in supply could potentially lead to increased prices if demand remains strong.
As highlighted in Sygnum Bank’s June 2025 Monthly Investment Outlook, the liquid supply of Bitcoin has decreased by approximately 30% over the past 18 months, with nearly 1 million BTC exiting exchanges. This trend indicates that fewer coins are readily accessible for trading.
Liquid Supply Tightens
According to Sygnum Bank’s reports, exchange balances have decreased by about 1 million BTC since late 2023, accounting for roughly 5% of Bitcoin’s total supply. When these coins leave exchanges, they are often moved into cold storage or are acquired by long-term investment vehicles, including newly established exchange-traded funds and corporate entities that raise capital to purchase Bitcoin.
This reduction in liquid supply means that traders must compete for a smaller pool of available coins, creating a disparity that can lead to increased price volatility, particularly on the upside.
Institutions and State Moves
Recently, three US states have enacted legislation to hold Bitcoin as part of their reserves. New Hampshire has already signed its bill into law, with Texas following suit and a third state also making significant progress, although details are yet to be finalized.
Moreover, international governments are taking notice. For instance, Pakistan’s government has expressed intentions to explore Bitcoin reserves, and the Reform Party in the UK, which is currently leading in polls, plans to investigate similar initiatives.
The act of a state or country purchasing Bitcoin can trigger additional buying pressure. This not only generates immediate demand but also reinforces the notion that public institutions regard Bitcoin as a viable store of value.
Safe-Haven Status Strengthens
Growing concerns regarding the US dollar and national debt have propelled some investors toward Bitcoin. In May, as US Treasury prices declined amidst apprehensions over increasing debt levels, both digital and physical gold experienced an uptick in interest.
Bitcoin is increasingly viewed as a hedge against weakness in the dollar. On days marked by Treasury market fluctuations, some cash has shifted toward cryptocurrency markets. Notably, recent data from Sygnum indicates that since June 2022, Bitcoin’s upward price movements have consistently outstripped its declines, suggesting that institutional investors are gaining confidence in maintaining positions amidst minor sell-offs.
Ethereum’s Comeback
Ethereum is witnessing renewed activity following a period of stagnant performance. The recent Pectra upgrade has introduced increased transaction fees and attracted fresh interest from major banks and financial institutions exploring tokenization platforms on Ethereum’s framework and its layer-2 solutions.
As more institutions engage in issuing tokenized assets, the entire cryptocurrency ecosystem may stand to gain. Increased activity within the Ethereum network often reverberates back to Bitcoin, further amplifying demand for these leading coins.
Featured image from Imagen, chart from TradingView
