In about nine months, the amount of Bitcoin available on cryptocurrency exchanges is expected to significantly decrease due to this week’s Bitcoin halving event, which reduces the issuance of new Bitcoins by half.
If US Bitcoin exchange-traded funds (ETFs) maintain their inflows, Bitcoin’s post-halving supply situation may result in Bitcoin (BTC) reserves being depleted from exchanges, as suggested in a report published on April 15 by Bybit.
“Bitcoin reserves in all centralized exchanges have been depleting faster. With only 2 million Bitcoins left, if we assume a daily inflow of $500 million to Bitcoin Spot ETFs, the equivalent of around 7,142 bitcoins will leave exchange reserves daily, suggesting that it will only take nine months to consume all of the remaining reserves.”
The amount of Bitcoin held on centralized exchanges dropped to approximately 1.94 million BTC as of April 16, based on information from CryptoQuant.
Amidst a broader market decline, the report emerges with Bitcoin experiencing a drop of more than 10% within the last week, reaching a price of $62,924 by 1:36 pm UTC, based on CoinMarketCap data.
According to a report, Bybit, which is the third-largest cryptocurrency exchange globally, anticipates that Bitcoin’s prices will begin to rebound following the recent price drop.
“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.”
Institutional interest in Bitcoin is on the rise
The rate at which money has been flowing into Bitcoin spot ETFs on a weekly basis has decreased significantly since March. Last week brought approximately $199 million in total inflows, a significant decrease from the $2.58 billion recorded during the week starting March 11th, as reported by Dune.
Although there has been a recent decline, Bitcoin ETFs have accumulated approximately 841,000 BTC, equivalent to around $52.9 billion, and have seen over $12.7 billion in inflows since their debut, based on data from Dune.
The proportion of investments in Bitcoin for both institutional and retail investors has grown significantly since last September. Based on the data from Bybit’s asset allocation report released on February 24, institutions are currently dedicating an average of 40% of their total assets to Bitcoin. In contrast, the average percentage of retail investor assets allocated to Bitcoin is 24%.
According to Bybit’s observation, an growing number of crypto companies and traditional financial institutions are investing in Bitcoin through Exchange-Traded Funds (ETFs) and proxy stocks like MicroStrategy. The platform anticipates that more institutions will adopt this approach in the future.
“We believe that not all institutions have been able to gain exposure since the approval of Bitcoin Spot ETFs in January 2024, as their investment mandates restrict them from investing in new products that have been in the market for only a few months.“
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2024-04-16 17:16