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Bitcoin’s diminishing supply: What’s happening?
With a reduced amount of BTC in circulation, specialists are preparing for a potential supply upheaval.
Bitcoin’s fixed cap of 21 million coins has consistently been fundamental to its attraction. However, by 2025, this inherent scarcity is evolving from a theoretical aspect to a market fact. 93% of all Bitcoin has already been extracted, and following the network’s fourth halving in April, which halved miner rewards, fewer new coins are being introduced to circulation each day.
Concurrently, long-term holders are maintaining their positions. An increasing portion of Bitcoin is now secured in cold storage, tied up in institutional assets or believed to be lost. Approximately 70% of the Bitcoin supply hasn’t shifted in at least a year, indicating that liquidity is diminishing.
With escalating demand from spot exchange-traded funds (ETFs), public corporations, and even sovereign wealth funds, the outcome is a tightening market that has analysts cautioning about a possible supply shock, a moment when available Bitcoin (BTC) on exchanges becomes insufficient to satisfy demand, potentially causing sharp price fluctuations.
Michael Saylor’s Bitcoin Approach: Unyielding accumulation
Saylor’s Strategy currently holds approximately 3% of all Bitcoin that will ever be created, and he’s not easing up.
Michael Saylor, executive chairman of Strategy, has dedicated himself to Bitcoin accumulation as his life’s objective. Since 2020, he has transformed the software company into a full-scale BTC holding entity, borrowing funds, issuing shares, and utilizing company funds to acquire additional Bitcoin.
As of mid-2025, Strategy possesses more than 2.75% of the entire Bitcoin supply (around 582,000 BTC) and continues to increase its holdings monthly. This assertive strategy raises concerns that a BTC supply shortage could be imminent. Fewer coins accessible on exchanges results in reduced liquidity, especially for new market entrants or retail traders looking to invest.
Did you know? Strategy now dominates the public leaderboard for BTC reserves, holding more coins than the combined totals of the US and Chinese governments. Its stockpile is nearly twelve times greater than that of the next nearest holder, Marathon Digital Holdings.
Bitcoin supply meets institutional appetite
Institutions are no longer merely observing crypto — they’re purchasing in substantial amounts.
Bitcoin’s transition from retail speculation to institutional-grade asset is now glaringly evident. Spot Bitcoin ETFs in the US and elsewhere have opened up new avenues for pension funds, banks, and investment firms.
BlackRock’s iShares Bitcoin Trust (IBIT) saw an average of $430 million net inflow per day during late May 2025, culminating in $6.35 billion of inflows for the month, its largest total to date. When institutions purchase via spot ETFs, the underlying Bitcoin is transferred into custodial cold storage. These transactions remove coins from exchanges, tightening the market’s liquid supply.
This surge in institutional demand introduces another dimension to the Bitcoin supply-and-demand disparity. Even conservative banks are starting to regard BTC as a long-term safeguard.
On May 27, Trump Media and Technology Group, the parent organization of US President Donald Trump’s Truth Social, announced a $2.5-billion fundraising round to acquire Bitcoin, reversing previously stated denials. Around this time, GameStop revealed a $500-million Bitcoin investment.
Meanwhile, Tether, SoftBank, and Strike CEO Jack Mallers declared the launch of Twenty One, a Bitcoin-native public enterprise poised to launch with over 42,000 BTC on its balance sheet, positioning it as the third-largest corporate holder globally.
Did you know? In 1992, MicroStrategy (now Strategy), co-founded by Michael Saylor, secured a significant $10-million contract with McDonald’s to develop software aimed at analyzing its promotional campaign effectiveness.
Bitcoin halving and whale accumulation: Is the market too skewed?
The 2024 halving decreased miner rewards from 6.25 to 3.125 BTC, constraining new supply from entering the market. Nonetheless, several participants now dominate a significant portion of total Bitcoin, igniting both optimistic and critical perspectives.
Bitcoin’s inherent halving cycle occurs approximately every four years, diminishing the number of new coins miners receive for validating blocks. Following the April 2024 halving, this amount fell to just 3.125 BTC per block, reducing Bitcoin’s inflation rate to below 1% annually.
While this trend is not new for experienced crypto observers, the latest halving coincided with a period of rising demand and intensified accumulation, creating an ideal scenario. By June 2025, daily issuance stood at 450 BTC, while Strategy alone acquires more than that weekly.
Strategy is not the only major player. Public wallets linked to Grayscale, Binance, and various ETF custodians now rank among the largest Bitcoin holders. Collectively, the top 100 addresses continue to control approximately 15% of the total supply.
Critics caution that this leads to the concentration of Bitcoin ownership, where dominance is consolidated within a small group.
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of hands, contesting the foundational principle of decentralization. The wealthiest organizations now possess a considerable portion of Bitcoin: Addresses holding 10,000 BTC represent 14% of all coins, prompting discussions about concentration versus confidence. Some contend this indicates confidence: These whales aren’t trading BTC for immediate gain; they’re investing for the long haul.
Did you know? By mid-2025, around 59% of institutional investors had designated at least 10% of their portfolios to Bitcoin and other digital assets. This signifies a monumental increase from prior years and illustrates Bitcoin’s evolution from a speculative asset to a key portfolio component.
Liquidity crunch: Will Bitcoin deplete?
No, Bitcoin won’t “deplete,” but available, tradable supply may diminish.
A widespread misconception is that Bitcoin will vanish from circulation. That’s not entirely accurate. Nevertheless, a Bitcoin liquidity crisis can happen when a substantial portion of the supply is kept offline, in cold wallets or ETFs, making trading cumbersome.
Currently, on-chain data indicates that exchange reserves are at their lowest points in years. This can lead to more unpredictable price fluctuations, both soaring and plummeting, as minor shifts in demand impact a limited supply.
As of early June 2025, the proportion of Bitcoin on exchanges has fallen below 11% of the total supply, the lowest rate since early 2018, resulting in a “dry market” susceptible to larger price shifts.
Will there be a Bitcoin supply shock in 2025?
It’s already in motion, albeit not all at once.
You may not witness a single explosive instance when Bitcoin “depletes.” However, all indications suggest a gradual BTC supply crunch. From miners receiving less to institutions acquiring more to whales holding onto their assets, the pressure is mounting.
Whether it incites a price surge hinges on one thing: new demand. If retail, corporate, and national purchasers keep entering the market, Bitcoin’s finite supply could generate a feedback loop of increasing prices and even greater demand.
“Over the long term, Bitcoin on the balance sheet has proven to be extraordinarily favored,” Saylor stated.
Did you know? Since Michael Saylor’s firm (Strategy) commenced purchasing Bitcoin in August 2020, BTC’s value has surged by 700%. Strategy’s daring accumulation not only elevated its own stock price by 2,500% but also inspired a wave of institutional and corporate engagement.
Bitcoin’s scarcity examined in real time
Scarcity has always been integral to Bitcoin’s central narrative, but it’s now undergoing real-time scrutiny.
The interplay of diminishing supply, institutional stockpiling, and decreasing miner rewards is transitioning Bitcoin into a new phase. Whether you perceive it as a bullish supply shock or a disconcerting centralization trend, the dynamics are evident: There’s less Bitcoin available.
This isn’t merely a numerical issue; it’s about perception. If institutional inflows persist and everyday users find it challenging to acquire even small amounts without premiums, a bullish supply shock could arise.
And yet, the macro backdrop is significant:
- Interest rates remain elevated worldwide.
- Governments exercise caution with Bitcoin due to regulatory ambiguity and environmental, social, and governance (ESG) apprehensions.
- Gold continues to be preferred by central banks as a reserve asset; over 1,000 tons was added to global reserves in 2024 alone.
So, will Bitcoin surpass gold as the foremost store of value? Not yet. However, 2025 signifies the first instance in history where Bitcoin’s scarcity profile is tighter, its supply dynamics more aggressive, and its adoption narrative broader compared to gold’s.
Investors, regulators, and everyday users alike should monitor this space closely. If Saylor and other whales persist in their accumulation and demand continues to rise, the real inquiry may not be whether there’s a supply shock, but rather how high Bitcoin might soar when it occurs.
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