Cointime

Download App
iOS & Android

Bitcoin’s shrinking supply may trigger price breakout: Sygnum

Bitcoin’s circulating supply is tightening fast, setting the stage for potential price surges as demand continues to grow, according to Sygnum Bank’s June 2025 Monthly Investment Outlook.

Sygnum analysts noted that Bitcoin’s liquid supply had dropped by 30% over the past 18 months, primarily driven by institutional adoption and the rise of Bitcoin acquisition vehicles.

These entities, including exchange-traded funds (ETFs) and corporate buyers, have steadily withdrawn coins from exchanges, a move typically seen as bullish.

“Bitcoin’s fast-shrinking liquid supply is creating the conditions for demand shocks and upside volatility,” the report said.

Since late 2023, Bitcoin balances on exchanges have fallen by about 1 million BTC. The trend is accelerating as a growing number of funds issue equity or debt to purchase Bitcoin, further soaking up available supply.

At the same time, geopolitical and fiscal uncertainties, particularly around the weakening US dollar and ballooning US debt, drive investors toward crypto markets.

Bitcoin dominance. Source: Sygnum

Three US states approve Bitcoin reserves

Adding to the momentum, three US states recently passed legislation permitting Bitcoin reserves. New Hampshire has already signed such a bill into law, with Texas likely to follow.

Meanwhile, international interest is growing. Sygnum highlighted that Pakistan’s government and Reform UK, the party currently leading in UK election polls, have announced intentions to explore Bitcoin reserve strategies.

Though official Bitcoin reserve purchases have yet to materialize, Sygnum said that when these begin, they could be a major catalyst for upward price movement, “both because of the demand it creates and because of the signaling effect.”

Institutional buying isn’t the only factor at play. Bitcoin’s image as a safe-haven asset is being reinforced by recent market dynamics. The report pointed to the sell-off in US Treasurys amid deteriorating fiscal conditions, buoying demand for Bitcoin and gold in May.

Bitcoin’s upside volatility outpaces downside

Sygnum also flagged Bitcoin’s improving volatility profile. Over the past three years, upside volatility has outpaced downside volatility, a sign of market maturation and growing institutional involvement.

“Although over the full history of Bitcoin, downside shocks have often been greater than upside shocks, over the past three years (since June 2022), upside volatility has consistently exceeded downside volatility,” the report said.

Source: Sygnum

Sygnum also mentioned that Ether is regaining momentum after years of underperformance. Therecent Pectra upgrade has driven strong revenue growth and renewed interest from major financial institutions building tokenization platforms on Ethereum and its layer-2 networks.

Comments

All Comments

Recommended for you

  • Trump States the U.S. Will Not Leave the Strait of Hormuz

    On May 2, U.S. President Trump stated that the United States will currently "not leave" the Strait of Hormuz. He defended the U.S. blockade actions, describing them as "very strong." Trump claimed that the blockade measures are effective and asserted that once the war is over, energy prices will significantly drop. "After this war ends, the prices of oil, gas, and everything will plummet," he said. He also praised the U.S. stock market for reaching historic highs and noted that projects during his administration are being completed "on time" and "on budget." (Jinshi)

  • Trump: Personally Inclined Not to Restart Bombing Operations Against Iran

    On May 2, U.S. President Trump stated that he ultimately has two options regarding Iran: either escalate military action significantly or reach an agreement. 'There are indeed options. Do we want to go in and blow them to smithereens to solve the problem once and for all? Or do we want to try to reach an agreement? Those are the options on the table,' Trump said. He also confirmed that he had just received the latest briefing on military options from the U.S. Central Command the previous night. Trump expressed his personal inclination not to restart bombing operations. 'From a humanitarian standpoint, I prefer not to do that,' he said at the White House. (CNN)

  • Trump: Unsatisfied with Iran's Latest Proposal

    On May 2, U.S. President Trump stated: 'Regarding Iran, I am not satisfied with the latest proposal. We are negotiating over the phone, and I am not sure if we can reach an agreement.' (Jinshi)

  • Benset: The Blockade Will Continue Until Iran Restores Pre-War Freedom of Navigation

    On May 1, U.S. Treasury Secretary Benset posted on the X platform, stating that it is difficult for a mouse in a sewer pipe to know what is happening in the outside world. Here are some 'realistic scenarios' for the Iranian leadership—after all, they are indeed in a dark state of information isolation: 1. The U.S. has complete control over the Strait of Hormuz. 2. There is a shortage of hard currency (i.e., U.S. dollars). 3. Rationing of food and gasoline has been implemented. 4. The entire international community has turned against you. 5. The blockade will continue until freedom of navigation is restored to what it was before February 27.

  • BTC Surpasses $78,000

    Market data shows that BTC has surpassed $78,000, currently priced at $78,016.69, with a 24-hour increase of 2.13%. The market is experiencing significant volatility, so please ensure proper risk management.

  • Crypto Exchange Startup Fun Secures $72 Million in Series A Funding

    Crypto exchange service startup Fun has disclosed that it has completed a $72 million Series A funding round, led by Multicoin Capital and tech venture capital firm SignalFire. Other participants include Infinity Ventures, Pharsalus Capital, and Tinder co-founder Justin Mateen. This funding transaction was completed in January of this year but was only made public recently. Fun declined to disclose the valuation of this funding round.

  • ETH Surpasses $2300

    Market data shows that ETH has surpassed $2300, currently priced at $2300.19, with a 24-hour increase of 1.6%. The market is experiencing significant volatility, so please ensure proper risk management.

  • Tether: Q1 Net Profit Reaches $1.04 Billion, Total Assets Approximately $191.77 Billion

    Tether's Q1 2026 performance report reveals that the company achieved a net profit of approximately $1.04 billion amid a highly volatile global market, with excess reserves rising to a record $8.23 billion. As of March 31, 2026, Tether's total assets were approximately $191.77 billion, with total liabilities around $183.54 billion, of which about $183.44 billion corresponds to issued digital tokens. This results in assets exceeding liabilities by $8.23 billion, while the circulation of USDT remained stable, with total token-related liabilities around $183 billion. In terms of reserve structure, Tether continues to focus on short-duration, highly liquid assets, holding approximately $141 billion in U.S. Treasuries, making it the 17th largest holder of U.S. debt globally. Additionally, its reserves include around $20 billion in physical gold and approximately $7 billion in Bitcoin holdings.

  • Israeli Media: U.S. 'About to Decide' on Resuming Military Action Against Iran

    On May 1, Israeli media reported that the United States is 'possibly about to decide' whether to resume military action against Iran, with Israel intensifying preparations to respond to a potential 'renewed conflict' with Iran. According to Israel's Channel 12, Israeli officials are on 'high alert' and preparing for the possibility that U.S.-Iran negotiations could collapse as early as early next week. The report cites senior officials in the Israeli government stating that the U.S. may increase pressure on Iran regarding the Strait of Hormuz and could launch military strikes against Iran's energy facilities and government infrastructure. (Xinhua)

  • BTC Surpasses $77,000

    Market data shows that BTC has surpassed $77,000, currently priced at $77,007.21, with a 24-hour increase of 1.64%. The market is highly volatile, so please ensure proper risk management.