The supply of Bitcoin on cryptocurrency exchange platforms could run out in nine months’ time, following the expected halving of supply during Bitcoin’s next halving, combined with continued hoarding by Bitcoin ETFs. The latest forecasts from Bybit, one of the world’s leading exchanges, are sparking a heated debate about the immediate future of the world’s leading cryptocurrency.
Bitcoin supply dwindling fast
Bybit’s report highlights an alarming trend: Bitcoin reserves on centralized exchanges have fallen to a level close to a three-year low, with just 1.94 million BTC available on April 16. Taking into account a daily inflow of $500 million to Bitcoin ETFs in the U.S., around 7,142 Bitcoins will leave exchange reserves on a daily basis, pointing to a depletion of reserves within the next nine months.
Market outlook and anticipated reactions
The drop of more than 10% in the price of BTC over the past week, bringing it down to $62,924 according to CoinMarketCap, doesn’t dampen Bybit’s optimism. The exchange, ranked third in the world, expects Bitcoin prices to recover from the current correction, boosted by the pre-halving supply shortage.
Institutional interest on the rise
Despite the recent drop in flows, Bitcoin ETFs recorded net inflows of over $199 million last week, according to Dune Analytics. These ETFs have already accumulated over 841,000 BTC, worth $52.9 billion, since their launch, with net flows exceeding $12.7 billion. Institutional investor allocation to Bitcoin has also increased since September 2023, with institutions allocating an average of 40% of their total assets to BTC.
The prospect of BTC supply running out on exchanges in nine months’ time is fuelling a sense of urgency and excitement among investors. With growing institutional demand and an imminent reduction in supply, the Bitcoin market is poised for major upheaval, perhaps redefining the dynamics of this iconic cryptocurrency.
