As Bitcoin trades close to its May peak, fresh data reveals a noticeable contraction in the asset’s available supply—driven largely by growing institutional interest.
According to Sygnum Bank’s June 2025 Investment Outlook, the ongoing bullish momentum is being powered by Bitcoin’s rising status as a safe-haven asset and a surge in institutional adoption. These factors are now contributing to a structural decline in liquid BTC supply, tightening the market and setting the stage for a potential price rally.
Over the past 18 months, Bitcoin holdings on exchanges have dropped by approximately one million BTC—a decline of nearly 30%. This trend is largely attributed to increased accumulation by ETFs and other institutional investment vehicles, which are redirecting capital from traditional assets like equities and bonds into the crypto market.
This sharp reduction in exchange balances is widely regarded as a bullish indicator, reflecting a growing preference for long-term holding among investors. With a steady influx of new institutional products and discussions among some governments about integrating Bitcoin into their national reserves, Sygnum Bank forecasts potential demand surges and increased price volatility.
The bank believes these structural changes may fuel the continuation of the current bull cycle. As institutional adoption gains momentum, the prospect of state-level participation further signals a maturing and expanding role for Bitcoin in the global financial system.
Three U.S. states have recently advanced legislation supporting the addition of Bitcoin to official government reserves, with New Hampshire making history as the first to enact such a law. Texas may be next, as its governor has publicly endorsed the move.
Globally, the momentum is building. The government of Pakistan and the Reform UK party—currently leading in the U.K. election polls—have both declared intentions to assess the feasibility of holding Bitcoin as a central bank reserve asset.
In Asia, think tanks aligned with Chinese policymakers have also proposed similar strategies. Though no official state-level purchases have occurred yet, unconfirmed reports hint at covert accumulation already in progress. Analysts at Sygnum Bank believe that when these frameworks lead to actual acquisitions, the resulting buy-side pressure could act as a major price catalyst.
This convergence of rising demand and strategic state-level interest is sending a powerful signal. Experts suggest it could significantly boost institutional participation and further accelerate Bitcoin’s mainstream adoption.
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