Bitcoin Supply to Deplete on Exchanges in 9 Months

The upcoming Bitcoin halving, which will result in a 50% reduction in the supply issuance of Bitcoin, is expected to cause a depletion of Bitcoin reserves on cryptocurrency exchanges within nine months. This prediction is based on the assumption that inflows from United States Bitcoin ETFs continue. According to a report by Bybit, the depletion of Bitcoin reserves on exchanges has been accelerating lately, and with only 2 million Bitcoins left, it is estimated that around 7,142 Bitcoins will leave exchange reserves daily if there is a daily inflow of $500 million to Bitcoin Spot ETFs. This would result in the consumption of all remaining reserves within nine months.

As of April 16, Bitcoin reserves on centralized exchanges hit a three-year low of 1.94 million BTC, according to CryptoQuant data. This decline in reserves coincides with a wider market slump that saw Bitcoin’s price drop over 10% in the past week to $62,924. Bybit, the world’s third-largest exchange, believes that Bitcoin’s price will start to recover from this correction, as the supply squeeze created by the halving will push the price to new record highs.

While weekly inflows into spot Bitcoin ETFs have been slowing down since March, the ETFs have still amassed over 841,000 BTC worth $52.9 billion, with a net flow of over $12.7 billion since their launch. This indicates a growing institutional interest in Bitcoin. Bybit’s asset allocation report from February 24 reveals that institutions are allocating an average of 40% of their total assets to Bitcoin, while retail investors allocate around 24%. The report also notes that both crypto-native firms and traditional institutions are increasingly gaining exposure to Bitcoin through ETFs or proxy stocks like MicroStrategy.

Bybit expects that more institutions will follow suit and invest in Bitcoin through ETFs, as it believes that some institutions have not been able to gain exposure to Bitcoin since the approval of Bitcoin Spot ETFs in January 2024 due to investment mandates that restrict them from investing in new products that have been in the market for only a few months. The outlook for Bitcoin’s supply dynamic after the halving is expected to contribute to its price growth in the coming months.

5 thoughts on “Bitcoin Supply to Deplete on Exchanges in 9 Months

  1. I’m skeptical about these price predictions. It feels like a big gamble.

  2. Of course, they’re just trying to manipulate the market and create FOMO. Wake up, people!

  3. Wow, the upcoming Bitcoin halving sounds like a game-changer! I can’t wait to see how it affects the supply and demand.

  4. I’m glad that more institutions will be able to invest in Bitcoin through ETFs. It opens up opportunities for those who were previously restricted by investment mandates. Bitcoin’s future looks bright indeed!

  5. So institutions are allocating 40% of their assets to Bitcoin? That’s just reckless.

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