Bitcoin Supply Plunges 30%: Are Institutional Buyers Fueling the Next Crypto Boom?

Bitcoin’s Liquid Supply in Freefall: Institutional Buyers, State Reserves, and a New Era for Crypto in 2025

Bitcoin’s available supply has dropped 30% in 18 months. Experts say this supply shock could supercharge prices and reshape the crypto market.

Bitcoin’s available supply is vanishing at a record pace. According to the latest June 2025 report from Switzerland’s Sygnum Bank, the liquid supply of bitcoin has slumped by 30% over just 18 months. Analysts point to relentless demand from institutional buyers and a new wave of exchange-traded funds (ETFs) as the driving force behind this dramatic compression—and they warn this could ignite a powerful, sustained bull run for the world’s leading cryptocurrency.

ETFs and Deep-Pocketed Buyers Tighten Bitcoin’s Supply

Major funds and institutional investors are busy pulling millions of bitcoin from public exchanges. This steady drain has reached a fever pitch since late 2023, with balances down an astounding 1 million coins. As ETFs ramp up purchases and hold larger amounts off-market, the available supply keeps shrinking—classic fuel for sharp price rallies.

Sygnum’s analysts see this as the recipe for a perfect storm: with so much bitcoin locked away, even small surges in demand could trigger intense upward price jolts and renewed volatility. This dynamic is drawing more professional investors to Bitcoin as both a speculative opportunity and a hedge.

CoinDesk and Bloomberg have both highlighted similar trends, noting how today’s institutional players are shaping the crypto landscape far more than retail traders.

Q&A: Why Are Governments Suddenly Interested in Bitcoin Reserves?

Three US states have now legalized the holding of Bitcoin for official reserves. New Hampshire has already signed its groundbreaking bill into law. Texas and others are on the brink of similar moves—a previously unthinkable step for state governments. Meanwhile, Pakistan’s government and the surging UK political party Reform UK have announced plans to explore Bitcoin reserve strategies.

International interest is spiking, as policymakers view digital assets as insurance against fiscal instability, declining US dollar strength, and ballooning government debt. Sygnum’s report hints that if official state-level purchases begin, the resulting demand—and psychological “signal”—could rapidly accelerate Bitcoin’s next price rally.

For the latest on global digital asset regulation, visit CBC or Reuters.

How Is Bitcoin Acting as a ‘Safe Haven’?

Bitcoin’s reputation as a safe-haven asset has never been stronger. Analysts are witnessing a clear shift: bond market turmoil and concerns over government debt are making investors favor both Bitcoin and gold. In May, a swift sell-off in US Treasury bonds sent institutional money flying into alternative stores of value—proving crypto’s growing maturity as part of mainstream portfolios.

Is Bitcoin Volatility Maturing?

Sygnum’s data reveals a striking new twist: over the last three years, bitcoin’s upward price swings (“upward volatility”) have steadily outpaced downward shocks. Historically, crashes dominated the narrative, but recent trends signal a more established, liquid, and institutionally supported market.

The report also notes a resurgence in Ethereum, where the latest Pectra update and renewed tokenization interest from financial giants are revitalizing the ecosystem.

Checklist: How to Navigate the 2025 Bitcoin Boom

• Follow institutional moves: Track major ETF flows and fund activity
• Watch policy shifts: State and national Bitcoin reserve laws could change demand overnight
• Diversify: Consider both Bitcoin and rising altcoins like Ethereum
• Monitor volatility: Be ready for price spikes—and drops—as supply keeps tightening
• Stay informed: Check trusted sources like CoinDesk and Bloomberg for daily updates

Now’s the time to rethink your crypto strategy. Stay alert—this market squeeze could reshape the future of finance!