A significant reduction in the available supply of Bitcoin has occurred, creating a favorable outlook for potential price increases as institutional demand continues to rise. This assessment is part of Sygnum Bank’s Monthly Investment Outlook for June 2025.
Key Highlights:
- Bitcoin’s liquid supply has decreased by 30% over the past 18 months, indicating stiffening market conditions.
- Institutional interest is on the upswing, with exchange-traded funds (ETFs) and corporate investment vehicles injecting fresh capital into Bitcoin.
- State-level Bitcoin reserves in the U.S. and increasing global interest may further stimulate demand and elevate BTC prices.
The report details that over the last 18 months, the liquid supply of Bitcoin has experienced a decline of 30%, a trend attributed to growing institutional adoption and the development of additional acquisition vehicles, including ETFs. During this timeframe, one million BTC have moved off exchanges, which is typically interpreted as a bullish indicator since such withdrawals often signify holders’ intent to keep their coins long-term.
“Bitcoin’s rapidly diminishing liquid supply is fostering conditions ripe for demand spikes and upward price fluctuations,” noted Sygnum in the report.
Institutional Demand Intensifies as ETFs Drive Capital into Bitcoin
The surge in institutional demand stands out as a major force behind this trend. An increasing array of ETFs and corporate investment vehicles are actively channeling new funds into Bitcoin.
These financial products provide equity and fixed-income investors, who previously could not invest directly in cryptocurrencies, with a means to gain exposure to Bitcoin.
Concurrently, the climate of geopolitical and macroeconomic uncertainty is steering more capital towards tangible assets such as Bitcoin.
According to the report, fiscal instability in the United States, coupled with a deteriorating dollar and extensive selloffs in Treasury bonds, has contributed to a more favorable environment for the cryptocurrency market.
The establishment of Bitcoin reserves at the state and national levels could serve as an additional catalyst. So far, three U.S. states have enacted legislation concerning Bitcoin reserves, with New Hampshire being the latest to do so. Texas is expected to follow suit, according to Sygnum.
International interest in Bitcoin is also gaining momentum. The government of Pakistan and Reform UK, which is currently leading in the UK election polls, have both shown a keen interest in Bitcoin reserves.
BREAKING: SUPPLY SHOCK IS REAL — only ~146K #Bitcoin left in OTC markets. Major institutional buys will soon hit public exchanges. Buckle UP. pic.twitter.com/jVFaLu9Tg5
— Carl ₿ MENGER (@CarlBMenger) March 9, 2025
While no formal purchases of Bitcoin have occurred yet, such actions could lead to significant momentum in prices, driven by the creation of new demand and evidence of institutional support.
Moreover, Bitcoin’s volatility landscape is changing. Sygnum indicated that upside volatility has consistently exceeded downside volatility over the past three years, reflecting a maturation of market dynamics and enhanced liquidity.
In the broader cryptocurrency ecosystem, sentiment has markedly improved. The report cited a “strong demand trend” for Bitcoin and increased on-chain activity—especially following Ethereum’s recent Pectra upgrade—as further indicators of the market’s strengthening fundamentals.
Coinbase CEO Indicates Potential for Bitcoin to Replace USD
In a recent statement, Coinbase CEO Brian Armstrong cautioned that Bitcoin could eventually take the place of the U.S. dollar as the world’s reserve currency unless lawmakers take action to manage America’s mounting debt.
“I love Bitcoin, but a strong America is also super important for the world,” Armstrong remarked on platform X this Tuesday. “We need to get our finances under control.”
The U.S. national debt has recently surpassed $37 trillion, amplifying concerns regarding long-term fiscal sustainability.
The article originally titled “Bitcoin Supply Shrinks 30% — Will BTC Price See an Institutional-Driven Rally?” was published on Finance Newso.
