The Bitcoin supply on centralized cryptocurrency exchanges is projected to be completely depleted within just nine months, according to a recent report by Bybit. This forecast stems from the powerful combination of reduced Bitcoin issuance following the 2025 halving event and sustained institutional demand, particularly through U.S.-based Bitcoin spot exchange-traded funds (ETFs).
As Bitcoin’s block reward was cut in half during the latest halving, the rate at which new coins enter the market has dropped by 50%. This structural shift in supply dynamics is intensifying scarcity—especially on exchanges, where sell-side liquidity is rapidly diminishing.
👉 Discover how Bitcoin’s shrinking exchange supply could trigger the next price surge.
Exchange Reserves at Multi-Year Lows
According to data from CryptoQuant, Bitcoin reserves held on centralized exchanges reached a near three-year low of 1.94 million BTC on April 16, 2025. This dwindling inventory reflects a broader trend of long-term holders and institutions moving Bitcoin off exchanges and into secure, non-custodial storage.
Bybit’s analysis highlights a critical threshold: with only about 2 million BTC remaining in exchange wallets, the pace of outflows driven by ETF demand could exhaust available supply in less than a year. The report estimates that if U.S. spot Bitcoin ETFs continue to attract an average of $500 million in daily inflows, approximately 7,142 BTC will be removed from exchange reserves each day.
At this rate, the entire remaining supply on exchanges could be absorbed within nine months—creating a supply vacuum that may catalyze a significant upward price movement.
The Role of U.S. Bitcoin ETFs
Since their approval in January 2024, spot Bitcoin ETFs have become a dominant force in the digital asset ecosystem. These investment vehicles have enabled traditional financial institutions, pension funds, and retail investors to gain regulated exposure to Bitcoin without managing private keys or navigating crypto-native platforms.
Despite a recent slowdown in weekly inflows—dropping to $199 million last week compared to $2.58 billion in early March—the cumulative impact remains substantial. As of the latest data from Dune Analytics, spot Bitcoin ETFs collectively hold over 841,000 BTC, valued at approximately $52.9 billion, with total net inflows exceeding $12.7 billion since launch.
This sustained accumulation directly impacts exchange liquidity. Every dollar invested in a Bitcoin ETF typically results in the fund purchasing BTC from the open market—often pulling coins off exchanges and into cold storage. Over time, this creates a tightening supply loop: fewer coins available for immediate sale → increased buying pressure → upward price momentum.
Institutional Adoption Accelerates
Bitcoin’s appeal among institutional investors continues to grow. Bybit’s February 2025 asset allocation report reveals that institutions now allocate an average of 40% of their digital asset portfolios to Bitcoin, significantly outpacing retail investors, who average a 24% BTC allocation.
Moreover, both crypto-native firms and traditional financial players are expanding their exposure through multiple channels—not just ETFs but also proxy investments like MicroStrategy’s corporate treasury strategy. However, Bybit notes that many institutions have yet to participate due to regulatory caution or internal investment mandates limiting exposure to newly launched products.
“This suggests there’s still significant dry powder waiting on the sidelines,” Bybit stated in its report. “As these constraints ease over the coming quarters, we expect further waves of institutional capital to enter the market.”
👉 See how institutional capital flows are reshaping Bitcoin’s market structure.
Market Correction: Short-Term Dip, Long-Term Outlook Intact
In the short term, Bitcoin has faced downward pressure, dropping over 10% in one week to trade around $62,924 as of mid-April 2025 (CoinMarketCap data). This correction aligns with typical pre-halving volatility and profit-taking after a strong rally.
However, Bybit remains optimistic about the long-term trajectory. The report argues that historical patterns and current fundamentals suggest Bitcoin is likely to resume its uptrend—both before and after the halving—fueled by the emerging supply squeeze.
“With this in mind, it’s unsurprising that Bitcoin’s price may continue to climb before the halving, or even afterward, as the supply squeeze propels the price to another new record.”
Core Keywords
- Bitcoin supply depletion
- Exchange reserve decline
- Bitcoin halving 2025
- Spot Bitcoin ETF demand
- Institutional Bitcoin adoption
- BTC price forecast
- Centralized exchange outflows
Frequently Asked Questions
Q: Why is Bitcoin supply on exchanges decreasing?
A: The decline is driven by strong demand from U.S. spot Bitcoin ETFs, which purchase BTC from exchanges and hold it in cold storage. Additionally, long-term holders are moving coins off exchanges, reducing available sell-side liquidity.
Q: How long until Bitcoin runs out on exchanges?
A: Based on current ETF inflow rates ($500 million daily), Bybit estimates that the remaining ~2 million BTC on centralized exchanges could be fully absorbed within nine months.
Q: What happens when exchange supply dries up?
A: A depleted exchange supply reduces selling pressure and increases scarcity. This imbalance between limited sell orders and rising demand often leads to sharp price increases.
Q: Are institutions still buying Bitcoin despite market dips?
A: Yes. While weekly ETF inflows have slowed recently, total holdings have surpassed 841,000 BTC. Institutional adoption remains strong, with many large players still waiting for regulatory clarity or internal mandate approvals.
Q: How does the halving affect Bitcoin’s price?
A: The halving reduces new supply by 50%, creating structural scarcity. When combined with steady or growing demand—as seen with ETFs—it often triggers bullish price cycles in the months following the event.
Q: Is retail investor interest in Bitcoin declining?
A: Not necessarily. While institutional allocation (40%) now exceeds retail (24%), overall retail participation remains robust. Many are adopting dollar-cost averaging strategies and holding through volatility.
👉 Learn how supply scarcity and ETF demand are setting up Bitcoin’s next major move.