Bitcoin Supply on Exchanges Drops, ETFs Spark Possible Supply Shock

Bitcoin’s supply on exchanges has dropped to a multi-year low, igniting discussions of a potential supply shock

Written by: Sophia Cruz • Monday, June 30, 2025 • 2 min read

• Last updated: Monday, June 30, 2025

Quick overview

Bitcoin's supply on exchanges has fallen to a multi-year low, raising concerns about a potential supply shock due to increasing institutional demand from US-based ETFs.
The amount of Bitcoin held on centralized platforms has dropped below 2.9 million, indicating a tightening market supply amid rising demand.
Recent purchases by spot Bitcoin ETFs have outpaced newly mined Bitcoin, creating an imbalance that suggests strong institutional interest is absorbing available supply.
Market analysts predict that the reduced circulating supply, combined with sustained demand, could lead to upward pressure on Bitcoin prices, potentially setting the stage for a bullish trend.

Bitcoin’s supply on exchanges has dropped to a multi-year low, igniting discussions of a potential supply shock as institutional demand through US-based ETFs continues to rise.

The number of Bitcoin held across centralized trading platforms recently fell below 2.9 million, signaling a tightening in market supply at a time when demand is showing signs of acceleration.

This shift is largely attributed to increased accumulation by spot Bitcoin ETFs in the United States. Over the past few weeks, these financial products have collectively purchased more Bitcoin than what has been newly mined, highlighting a growing imbalance between supply and demand. This trend suggests that institutional interest is not only strong but may be absorbing available supply at an unsustainable pace.

The declining exchange balances reflect a broader investor behavior pattern. When large holders, including institutions and long-term investors, move Bitcoin off exchanges, it typically indicates a shift toward holding rather than selling. This reduces the available float in the market, tightening liquidity and setting the stage for price volatility, especially on the upside.

Market analysts are beginning to factor this dynamic into their forecasts. Some expect that if demand from ETFs and large entities remains consistent, the reduced circulating supply could put upward pressure on Bitcoin prices. This is particularly relevant as Bitcoin continues to consolidate above $100,000, with growing chatter around whether a new all-time high could be on the horizon.

At the same time, the drop in exchange-held Bitcoin also lowers immediate sell pressure, which often acts as a cushion during price corrections. It reflects growing confidence in Bitcoin’s long-term value, especially as macroeconomic factors remain uncertain.

In summary, the current market structure is showing signs of a bullish squeeze forming. A steady decline in available Bitcoin, matched with rising institutional appetite, points to an environment where prices could rise sharply if momentum continues. As Bitcoin ETFs mature and investor interest deepens, the possibility of a supply shock is becoming more than just speculation, it’s shaping up as a key narrative for the second half of 2025.

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ABOUT THE AUTHOR See More

Sophia Cruz

Financial Writer - Asian & European Desks

Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.