Bitcoin Supply Decreases by 30% — Could Institutional Interest Propel BTC Prices?

The circulating supply of Bitcoin has significantly decreased, paving the way for possible price increases as institutional interest rises, as noted in Sygnum Bank’s recent Monthly Investment Outlook for June 2025.

Key Takeaways:

• Bitcoin’s liquid supply has decreased by 30% over the last 18 months, indicating tighter market conditions.
• Institutional interest is growing, with ETFs and corporate entities directing new investments into BTC.
• Bitcoin reserves at the state level in the US and increasing global interest may stimulate new demand and elevate BTC prices.

According to the report, the liquid supply of Bitcoin has fallen by 30% in the past 18 months, influenced by heightened institutional adoption and a rise in investment vehicles like exchange-traded funds (ETFs).

During this timeframe, one million BTC have been withdrawn from exchanges — a typically bullish indicator, as coins are frequently taken out for long-term storage.

“The rapid decline in Bitcoin’s liquid supply is establishing the conditions for demand shocks and upward volatility,” Sygnum stated.

Institutional Demand Increases as ETFs Direct Capital Into Bitcoin, Reducing Supply

Institutional interest is a primary factor driving this trend. An increasing number of ETFs and corporate structures are directing new investments into BTC.

These vehicles enable equity and fixed-income investors, many of whom were previously unable to hold crypto directly, to gain exposure to Bitcoin.

Simultaneously, geopolitical and macroeconomic uncertainties are steering more investments toward tangible assets like Bitcoin.

Fiscal instability in the US, a declining dollar, and the selloff in Treasurys have all contributed to a more favorable environment for crypto markets, the report highlighted.

The rise of Bitcoin reserves at both state and national levels may serve as an additional catalyst. Three US states have enacted Bitcoin reserve legislation, with New Hampshire having already signed its bill into law. Texas is also expected to follow suit, according to Sygnum.

International interest is also on the rise. The Pakistani government and Reform UK, which is currently leading in the UK election polls, have both shown 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

Although no official BTC purchases have been made thus far, such actions could ignite considerable price momentum once executed, by generating new demand and indicating institutional support.

Additionally, Bitcoin’s volatility profile is changing. Sygnum reports that upside volatility has consistently surpassed downside volatility over the last three years, a change that reflects evolving market dynamics and increased liquidity.

In the wider crypto landscape, sentiment has markedly improved. The report noted a “strong Bitcoin demand trend” and increased onchain activity — particularly following Ethereum’s recent Pectra upgrade — as further indicators of strengthening market conditions.

Coinbase CEO cautions Bitcoin Could Supplant USD

Coinbase CEO Brian Armstrong has cautioned that Bitcoin might ultimately replace the USD as the global reserve currency if lawmakers do not address the escalating US debt.

“I love Bitcoin, but a strong America is also super important for the world,” Armstrong posted on X Tuesday. “We need to get our finances under control.”

The U.S. national debt has recently surpassed $37 trillion, adding urgency to concerns regarding long-term fiscal stability.

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