Bitcoin reserves on cryptocurrency exchanges have reached their lowest point since 2018, signaling a potential supply shock as institutional investors ramp up their buying.
According to CryptoQuant, the total reserves dropped to 2.35 million BTC by January 13, a sharp decline attributed to consistent accumulation by large-scale players.
This reduction in supply coincides with increased activity from hedge funds, which are reportedly taking advantage of the market dip to expand their crypto portfolios. André Dragosch, Bitwise’s research head, noted a growing correlation between hedge fund performance and Bitcoin, indicating a stronger commitment to the asset.
A potential supply shortage may be on the horizon, as demand outpaces supply. In December, US Bitcoin ETFs purchased nearly triple the amount of Bitcoin mined, driving the cryptocurrency to a record high of $108,300. However, analysts caution that low trading volumes could impede Bitcoin’s ascent above the critical $100,000 mark in the short term.
The broader crypto market shows similar stagnation, with trading activity reaching a two-month low. Analysts maintain cautious optimism, projecting that macroeconomic trends such as an anticipated surge in global liquidity could propel Bitcoin to new highs, potentially surpassing $150,000 by late 2025.