Key Points
- Over 95% of Bitcoin has been mined, potentially leading to scarcity as BTC withdrawals from exchanges increase.
- U.S. President Donald Trump’s plan for a strategic Bitcoin reserve and developments like institutional adoption and Layer 2 rollout could boost demand for Bitcoin.
More than 19.96 million Bitcoins have been mined, accounting for over 95% of the total Bitcoin supply. This could lead to a scarcity of the cryptocurrency as the pace of BTC withdrawals from exchanges quickens.
Bitcoin Scarcity and Demand
Since the U.S. Presidential election results in November 2024, Bitcoin supply on exchanges has decreased by nearly 15%. Meanwhile, supply outside of exchanges has risen from 17.99 million to 18.3 million. This shift in supply dynamics is generally seen as a bullish sign for Bitcoin.
Matthew Sigel, the Head of digital assets research at VanEck, has analyzed 20 state-level Bitcoin reserve bills. He predicts that if these bills are enacted, they could generate $23 billion in demand for Bitcoin. This prediction does not include potential demand from pension fund allocations.
U.S. Strategic Bitcoin Reserve
President Trump has proposed the creation of a Strategic Bitcoin Reserve, a move that could significantly impact the crypto market. The U.S. administration currently holds almost 200,000 Bitcoins, which were seized through FBI investigations. The idea of a Bitcoin reserve is currently under discussion.
The concept of holding Bitcoin as a reserve asset strengthens demand for the token from the U.S. As a result, institutional investors and Wall Street Bankers are considering the feasibility of adding the asset to their balance sheets.
Bitcoin Layer 2 Protocols
Kevin Liu, founder and CEO of GOAT Network, discussed the potential and future of Bitcoin Layer 2 protocols. He stated that many large institutions are keen to learn more about Bitcoin Layer 2 networks and BTCFi. Liu also noted that both institutions and individual users have shown a reluctance to sell their Bitcoin.
Bitcoin Price Forecast
Crypto intelligence tracker Santiment predicts an incoming capitulation in Bitcoin. This refers to a situation where a large number of investors sell an asset out of fear of a steeper price correction. However, whales and large entities continue to accumulate BTC.
According to derivatives market data on Derive.xyz, 47.3% of all premiums were calls sold and 24.4% calls bought, indicating that traders are expecting some upside but with capped potential.
Dr. Sean Dawson, Head of Research at Derive.xyz, maintains an optimistic outlook on Bitcoin price in the near and long-term. On the daily timeframe, technical indicators support a bullish thesis and a likely return to test the all-time high of $109,588.
The disclosure at the end of the article emphasizes that the content is for educational purposes only and does not constitute investment advice.
