Bybit Reports Near Depletion of Bitcoin Supply on Exchanges

Bitcoin Exchange Supply Depletion Forecast

The available Bitcoin supply on exchanges is rapidly diminishing, potentially reaching depletion within the next nine months, according to a recent analysis by Bybit.

Current Bitcoin Exchange Supply Status

• Only 2 million BTC is present on centralized crypto trading platforms.
• This represents less than 10% of the entire network’s supply.

Implications of Decreasing Exchange Supply

If a daily inflow of $500 million to Bitcoin Spot ETFs continues, approximately 7,142 bitcoins will leave exchange reserves daily. This suggests that it will only take nine months to consume all of the remaining reserves.

Since the launch of U.S. Bitcoin spot ETFs in January, they have absorbed $12.4 billion in net inflows from retail and institutional investors, resulting in roughly 221,000 BTC being taken off the market.

Upcoming Bitcoin Halving and Market Impact

The next Bitcoin halving is imminent and will cut Bitcoin’s supply inflation rate in half for the fourth time in the network’s history. This will lead to a significant reduction in the asset’s daily supply issuance, causing a further market supply shortage.

Blackrock and other ETFs are currently buying over 10,000 bitcoins a day, raising questions about the impact of reduced daily mining output.

Bitcoin Miner Behavior and Market Dynamics

Bybit suggests that there may be a pronounced Bitcoin selloff in the short term post-halving, especially from weak mining firms. Unprofitable miners might sell their Bitcoin reserves to support their operations, potentially affecting the overall sell-side supply to centralized exchanges.

While historical miner behavior prior to halving events has shown accumulation, the current cycle indicates earlier reserve unloading. The report speculates a potential Bitcoin rally twelve months after the upcoming halving, with the likelihood of a new all-time high.