- Since 2024, Bitcoin supply has dropped 20-30% on exchanges and OTC desks.
- Analysts projected that the growing global liquidity could further boost BTC.
Bitcoin [BTC] has stayed above $100K for nearly four weeks, but the asset’s explosive run may be far from over amid an imminent supply crunch.
With massive FOMO and demand from Bitcoin corporate treasuries, the underlying supply may fail to match the appetite.
Bitcoin supply crunch intensifies
On exchanges, popular amongst retailers, BTC reserves have declined over 21% from 3.2 million to 2.5 million BTC since early 2024.
Interestingly, the extended decline coincided with the U.S. spot BTC ETF debut. Another supply point for most institutions, OTC (Over-The-Counter) Desks, has also recorded a steady deficit.
Over the same period, OTC BTC balance dropped from over 211K BTC to 135K BTC. This translated to a 36% decline, much steeper than the exchange reserve change.
The steady supply drop could be construed as a bullish catalyst, especially with Strategy and Strategy-like copy-cats jumping on BTC.
However, these figures, the OTC balance and exchange reserve, aren’t static and could receive new BTC inflows to replenish the supply from sellers.
That said, the growing global liquidity could be another crucial catalyst for the asset. According to Jamie Coutts, Chief Crypto Analyst at Real Vision, BTC could explode if liquidity climbs higher.
“While Bitcoin’s sensitivity to GLI moderates over time, for every extra 1% of liquidity added to the system, we should expect to see a >20% move in the price in Bitcoin.”
Coutts highlighted that the global liquidity index (GLI) surged 2% in Q2 and may have influenced the 40% BTC recovery.
The above liquidity-driven thesis was supported by Bitwise’s Andre Dragosch. He noted that the global money supply has hit a 3-year high and could fuel the BTC price.
On the price outlook, Polymarket betters placed the highest odds (76%) on the $120K level. Other 2025 price targets included $130K and $150K with a 56% and 36% chance, respectively.
