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Is a Bitcoin Supply Shock Imminent?
The meteoric rise of Bitcoin has sparked passionate debate among crypto investors, analysts, and enthusiasts. With Bitcoin prices regularly hitting new highs and the cryptocurrency’s supply gradually becoming more scarce, questions about the future trajectory of the entire digital asset market have intensified. While most traders focus on the psychological milestone of Bitcoin surpassing $110,000, Bitwise CEO Hunter Horsley foresees a transformative change in market dynamics looming on the horizon.
Why Long-Term Holders May Stop Selling
According to Horsley, as Bitcoin’s value approaches the $130,000 to $150,000 range, pioneering holders—both individuals and large institutions—will likely stop selling their assets. He notes that many of these early adopters amassed their Bitcoin holdings when prices were significantly lower, and the recent bull runs have seen many taking profits.
However, Horsley believes this trend may be nearing its end. As Bitcoin’s price climbs, so does the conviction among long-term holders. Instead of liquidating their assets, Horsley predicts that these investors will increasingly seek alternative liquidity strategies—such as leveraging their Bitcoin through loans or decentralized finance (DeFi) platforms. This change in behavior could further constrict the available supply, potentially pushing Bitcoin prices even higher.
Diverging Opinions Within the Market
Not all market watchers agree with Horsley’s perspective. Many argue that the fundamental buy-and-sell nature of trading will continue to prompt profit-taking at higher price points, resulting in new waves of selling. Yet, current data appears to support the Bitwise CEO’s outlook.
On-Chain Data Points to Shrinking BTC Supply
Recent blockchain analytics highlight shrinking Bitcoin liquidity on centralized exchanges, steady declines in short-term seller activity, and mounting evidence that investors are shifting toward long-term holding strategies. Data published in a June 10 CryptoQuant report revealed a continued outflow of Bitcoin from exchanges.
In the past year, over 550,000 BTC have been withdrawn from major centralized platforms. Exchange reserves are now at their lowest levels in more than eight years—an indicator that more participants are moving their Bitcoin to private wallets or secure storage solutions, opting to hold rather than sell.
Institutional Investors Tightening the Supply Further
Driving this tightening of supply is heightened institutional interest in Bitcoin. From the explosive launch of U.S.-listed Bitcoin ETFs—which now collectively hold about 6% of all circulating BTC—to a wave of sovereign reserves being considered globally, institutional actors are amassing significant long-term positions. Unlike retail traders, these major financial players generally pursue long-term returns rather than short-term speculation.
As more Bitcoin is removed from the market and locked away in institutional portfolios and secure holdings, the supply crunch intensifies. This growing scarcity, according to many observers, sets the stage for upward price pressure, potentially validating Horsley’s vision of a Bitcoin supply crisis that could reshape the digital asset landscape.
Source: crypto
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