- OTC supply of Bitcoin is now just 140,000 BTC, signaling a potential market squeeze.
- 750,000 BTC absorbed by ETFs and Strategy, reducing Bitcoin’s available supply.
- Bitcoin dominance hits 58.3%, reflecting strong institutional demand amid tightening supply.
The Bitcoin supply on Over-the-Counter (OTC) desks has dropped significantly to an estimated 140,000 BTC, with availability for institutional buyers shrinking due to large outflows. Long-term accumulation wallets, which receive Bitcoin and rarely sell, have added further pressure on the market. The declining supply of Bitcoin available on OTC desks and exchanges creates additional concerns about future shortages. Large organizations, including ETF issuers and Strategy (formerly MicroStrategy), have collectively acquired 750,000 BTC, further tightening supply.
Notably, in January 2025, ETFs purchased over 50,000 Bitcoin, thus reducing the available supply of Bitcoin on OTC markets. According to an analyst on social media platform X, institutional investment in Bitcoin and reduced market supply create conditions that could generate sudden demand increases. For instance, Strategy’s ongoing Bitcoin acquisitions highlight its role in reducing available supply. Its ongoing purchase activities and those of other institutions create a scarcity of coins that could trigger a sudden increase in market demand.
Market Conditions and Shifting Demand
Bitcoin’s market dynamics have begun to transform based on recent market conditions. The decreasing availability of OTC Bitcoin supply means big buyers will need alternative means to acquire BTC, such as exchange purchases. Open market transactions would shift Bitcoin’s market value since there are limited coins available, which could cause its price to rise.
The Bitcoin price shows ongoing stability at $97,000, while BTC dominates 58.3% of the cryptocurrency market when compared with Ethereum (ETH) and other cryptocurrencies. Market stability suggests ongoing strategic accumulation by whales and institutional investors, maintaining supply-demand equilibrium. Demand has slowed down noticeably since the trading peak occurred after the elections. The Bitcoin Fear and Greed Index recently dropped to 43 points, signaling a shift to market fear after the bullish sentiment seen in January 2025.
Related: Trump’s Crypto Czar Unveils Regulations and BTC Reserve Plan
Implications of a Tightening Bitcoin Market
The declining Bitcoin reserves at OTC desks may lead to increased market volatility, forcing institutions to buy directly from exchanges. Transactions handling substantial amounts of Bitcoin significantly affect market price levels due to their size. The transition from OTC to open-market purchases plays a significant role in forecasting Bitcoin price developments because it can lead to derivative market-driven price spikes.
