The supply of Bitcoin held on cryptocurrency exchanges has plummeted to its lowest level in seven years, signaling a pronounced shift in investor behaviour towards long-term accumulation.
Exchange balances now represent just 14.5% of the Bitcoin supply, a threshold not seen since August 2018. Concurrently, Bitcoin’s market share relative to the broader cryptocurrency market increased by approximately 1% last month, further highlighting its appeal compared to alternative cryptocurrencies.
Analysts attribute this diminishing exchange liquidity to increased investor conviction in holding assets for the long term and the rise of diversified avenues for institutional access. These include Bitcoin exchange-traded funds (ETFs), publicly traded companies holding Bitcoin on their balance sheets, and investments in blockchain-focused equities. This reduced readily available supply, combined with escalating institutional and corporate demand, potentially sets the stage for a significant market breakout.
Reflecting this bullish sentiment, major financial institutions like Standard Chartered predict Bitcoin could reach $200,000 by year-end, citing growing demand via approved ETFs.