According to Cryptoquant data, the supply of Bitcoin held in central exchange has reached its lowest point since 2019. As of late April 2025, only about 2.5 million BTC remained in exchange, representing a 500,000 coin decrease since the end of 2024.
Bitcoin supply in exchange shows a shift towards independence
The decline in Bitcoin supply in exchange balances is widely interpreted as a sign that more investors are moving BTC into individuals’ independent wallets. This behavior is usually associated with long-term holdings or “hodling” as it withdraws coins from platforms that investors can easily sell.
Deleting Bitcoin from the exchange is a trend that has been built since early 2023, when reserves were around 3.2 million btc. This trend has accelerated over the past year with the involvement of major institutional athletes.
Institutional demand could drive global supply crunch
Institutional demand could drive the supply crunch of Bitcoin, as major companies like Fidelity have purchased a significant amount of Bitcoin. Fidelity alone has recently won $253 million worth of BTC, helping to leak coins from the exchange. Bitcoin veteran Dennis Porter went crazy:
“We’ve never seen this. We’ve never had a global Bitcoin supply crunch. Bullish.”
Famous Crypto Trader Cas Abbe Post:
“Since the third quarter of 2018, Bitcoin exchange supply has now fallen to its lowest level. As of today, 2.5m $BTC has dropped by 500K from the fourth quarter of 2024. A few days ago, Fidelity said that the institution has consistently bought and withdrawn BTC from the exchange.
Supply 📉 +Demand📈=Price explosion
A recent Coinbase survey shows that over three-quarters of institutional investors plan to increase their digital assets allocation in 2025. Many have already used or investigated Bitcoin for portfolio diversification and as a hedge against macroeconomic uncertainty.
The public companies led by Strategy have withdrawn from the exchange since November 2024, with over 425,000 BTCs acquired by listed companies actively accumulating Bitcoin.
How will the reduction in Bitcoin supply for exchanges affect the market?
A shrinking supply of Bitcoin on exchanges has several implications for the market, including a decline in sales pressure. Few coins are available for immediate sales, reducing the risk of large-scale sales, resulting in price stabilization and hikes.
If demand continues to increase while supply is constrained, the market may also experience a supply shock.
Posted by on-chain analyst Willy Woo:
“BTC’s fundamentals are bullish and not a bad setup to break all the Time Highs.”
The move towards independence and long-term retention reflects the mature crypto market. There, both retail and institutional investors view Bitcoin as a strategic asset rather than a speculative play.
The reduction in Bitcoin supply in exchange is widely considered a bullish indicator. However, it also means that a sudden spike in demand could lead to increased price fluctuations. In the coming weeks, we will know whether this supply crunch will be converted to the next leg of Bitcoin’s rally, or whether market sentiment will change as new macroeconomic data emerges.
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