Bitcoin's circulating supply has experienced a notable decrease, with liquid BTC dropping by approximately 30% over the past 18 months. This decline creates a potential scenario for increased price volatility in the coming months, as detailed in Sygnum Bank's latest market outlook. The report highlights that Bitcoin's constrained liquid supply, combined with positive demand trends, could lead to "upside shocks" in its price.
Since late 2023, over a million BTC has been withdrawn from exchanges, driven by investment vehicles such as ETFs and corporate treasuries. This trend intensifies pressure on traders needing liquidity to exit during price spikes or to cover shorts. Additionally, Bitcoin is gaining renewed recognition as a safe-haven asset amid challenges faced by U.S. Treasurys and a declining dollar. Falling Treasury prices and increasing federal debt have prompted investors to reconsider gold and Bitcoin as viable hedges.
Geopolitical developments also add potential demand, with three U.S. states passing Bitcoin reserve bills—New Hampshire's bill has already been signed into law, with Texas likely to follow suit. Furthermore, nations like Pakistan and politicians in the U.K. are considering Bitcoin reserves. Although these measures are largely symbolic presently, they could significantly influence the market if put into action.
Since late 2023, over a million BTC has been withdrawn from exchanges, driven by investment vehicles such as ETFs and corporate treasuries. This trend intensifies pressure on traders needing liquidity to exit during price spikes or to cover shorts. Additionally, Bitcoin is gaining renewed recognition as a safe-haven asset amid challenges faced by U.S. Treasurys and a declining dollar. Falling Treasury prices and increasing federal debt have prompted investors to reconsider gold and Bitcoin as viable hedges.
Geopolitical developments also add potential demand, with three U.S. states passing Bitcoin reserve bills—New Hampshire's bill has already been signed into law, with Texas likely to follow suit. Furthermore, nations like Pakistan and politicians in the U.K. are considering Bitcoin reserves. Although these measures are largely symbolic presently, they could significantly influence the market if put into action.
