Bitcoin is on the precipice of a supply crisis as exchange reserves continue to dwindle and institutional demand skyrockets. The experts pointed out that this development could mean a major price jump for the crypto asset. This perfect storm of conditions is driving anxiety over an imminent oil supply shock.
Samson Mow, CEO of JAN3, first alerted the world to a double Bitcoin whammy coming in January 2024. The resulting shock was the SEC’s approval of a batch of spot Bitcoin ETFs. At the same time, institutional actors such as BlackRock’s IBIT increased their frenzied BTC purchases. These factors have significantly impacted Bitcoin availability.
Jeremie Davinci, an early Bitcoin adopter and popular YouTuber, recently shone a spotlight on the sinking Bitcoin reserves on exchanges. As noted by Davinci, this crossroad has led to what may actually be the beginning of “No Bitcoin left on exchanges.” First, miners are recently opting to hodl their Bitcoin and not sell them. This regulatory decision deepens the uncertainties for investors, leaving many to think that getting their hands on Bitcoin will be more difficult than ever.
The April 2024 Bitcoin halving added to supply worries. In the aftermath of the halving, we saw a surge in ETF accumulation, further tightening the supply of available Bitcoin.
Mow has predicted that these three converging shocks might soon propel the price of Bitcoin to $1 million. Bitcoin’s bullish sentiment took another step forward as it soared to a record high of $109,100 on January 20, 2025. This unprecedented jump occurred at the same time as Donald Trump’s surprise return to the White House.
In a significant policy shift under Gary Gensler’s leadership, the SEC has finally approved multiple spot Bitcoin ETFs. This decision has opened the floodgates to more institutional, long-term investors in the Bitcoin market. With institutional players such as BlackRock’s IBIT constantly buying up BTC, the supply on exchanges is depleting quickly. Combined with the supply becoming scarcer, this could make it harder to acquire Bitcoin as time goes on.
