Bitcoin’s $1 Million Path: Ancient Holders and Institutional Demand Create Perfect Storm Above $105K
Bitcoin is still trading solidly above $105,000, but a stunning change in supply is changing the cryptocurrency's long-term path. A recent
Quick overview
- Bitcoin's ancient supply is expanding faster than new coins are created, indicating a significant shift in its supply dynamics.
- Institutional demand for Bitcoin is projected to reach up to $426 billion by 2026, potentially making a large portion of its supply illiquid.
- Despite recent price fluctuations, on-chain metrics suggest a bullish long-term outlook for Bitcoin, with predictions of a price increase to around $205,097 by the end of 2025.
- The combination of increasing institutional adoption and a tightening supply could make Bitcoin's goal of reaching $1 million more attainable.
Bitcoin BTC/USD is still trading solidly above $105,000, but a stunning change in supply is changing the cryptocurrency’s long-term path. A recent analysis from Fidelity Digital Assets says that Bitcoin’s “ancient” supply, coins that have been held for more than 10 years, is now expanding faster than new coins are being created. This is a big change in the asset’s basic economics.
The data shows that 550 BTC are going into the ancient supply category every day, but only 450 BTC are being given out as mining rewards. This is the first time in Bitcoin’s history that long-term accumulation has outperformed fresh supply development. This has made what analysts are calling a “supply squeeze” even worse, which might push prices up to $1 million.
Institutional Capital Flows Signal Unprecedented Demand Wave
Accelerating institutional adoption is making the supply dynamics even stronger. In their base case scenario, Bitwise thinks that Bitcoin inflows might reach $120 billion by 2025 and $300 billion by 2026. There are many factors that drive demand. For example, nation-states might move 5% of their gold reserves ($161.7 billion), US states might adopt Bitcoin at 30% allocation rates ($19.6 billion), wealth management platforms might dedicate 0.5% of their assets ($300 billion), and public companies might double their Bitcoin holdings ($117.8 billion).
If things go well, inflows might reach more than $426 billion, which would be more than 4 million Bitcoin, or 19% of the total supply. This institutional accumulation, along with the increasing availability of old coins, points to a situation in which a large part of Bitcoin’s 21 million coin supply becomes permanently illiquid.
BTC/USD Technical Analysis: Consolidation Above Key Support Despite Geopolitical Headwinds
From a technical point of view, Bitcoin is going through a rough patch but still holding on to important support levels. The asset is currently worth about $104,292 and is above the important support level of $103,600, which is the same level as the previous all-time high from late 2024. This level has been a crucial battleground, with BTC bouncing off of it many times in the past few weeks.
The 12-hour chart shows that Bitcoin has been making lower highs since it hit $112,000. This suggests that bullish momentum is fading after it failed to break over the $109,300 barrier level. The 50-period SMA is providing dynamic resistance, and the 100-period and 200-period SMAs at $104,065 and $94,617, respectively, are adding even more support.
Volume patterns suggest that people are selling carefully instead than giving up, while on-chain data from CryptoQuant shows that realized profits are still below $1 billion, which is similar to what happened following the October 2024 downturn. This lack of profit-taking activity shows that long-term holders still believe in the overall upward trend.
On-Chain Metrics Support Bullish Long-Term Outlook
Even though the market has been very unstable lately because of geopolitical tensions in the Middle East and uncertainty about the economy as a whole, on-chain indications show a positive trend. The Bitcoin Yearly Percentage Trend, which has been tracking BTC’s performance since 2011, shows that if BTC keeps growing at its usual third-year cycle rate, it might go up 120% in 2025. This would raise the price of Bitcoin from $93,226 at the start of 2025 to about $205,097 by the conclusion of the year.
Whale activity exhibits accumulation patterns, with 4,500 BTC taken out of Binance on June 16. This is a move that has historically been linked to price increases. Also, both whale and retail inflows to exchanges have declined to cycle lows. This means that investors are holding on to their investments in the hopes of making more money.
Bitcoin Price Prediction: Will BTC Cross $1 Million?
The road to a million dollars Bitcoin needs a market cap of $21 trillion, which is ten times more than the existing $2.10 trillion. With 19,880,604 BTC already mined (94.66% of the total supply), the logic behind scarcity is becoming more and more convincing.
Right now, 17% of Bitcoin’s supply is thought to be illiquid because of old holdings. Some estimates say this might go up to 30% (6.3 million BTC) by 2026. The accessible liquid supply keeps getting smaller as demand grows, especially when you look at institutional accumulation tendencies.
But there are still problems to solve. Data from after the 2024 election shows that ancient supply fell on 10% of days, which is about four times the historical average. This means that even long-term investors would sell when there is a lot of volatility. This means that even while illiquidity trends are strong, changes in the market can still cause supply to go up, which slows down price growth.
The combination of old supply growth, institutional adoption, and basic scarcity dynamics makes a strong case for Bitcoin’s continued rise in value. $1 million is still an audacious goal, but the recent trends imply it might be more attainable than we thought. This is because the supply crunch is getting worse as Bitcoin becomes a global store of value.
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