Bitcoin Is Disappearing from Exchanges—And It All Started with Saylor

Key Takeaways

• Bitcoin issuance is at its lowest due to halving and institutional lockups, which reduce market liquidity.
• Strategy’s 592,345 BTC hoard worsens corporate concentration, deprives market liquidity, and undermines Bitcoin’s decentralization ethos.
• Bitcoin’s 1,051% five-year rally and 43,131% ten-year increase dwarf traditional equities, bonds, and gold returns.
• Persistent supply constraints could heighten price volatility, entrench Bitcoin’s digital-gold status, and consolidate market power.

Executive Chairman of Strategy Michael Saylor pointed out that newly mined Bitcoins enter circulation at the slowest rate ever i.e., BTC supply is drying up. Meanwhile, increasing institutional demand, mainly driven by spot ETFs and treasuries, drains Bitcoin from exchange order books into cold storage.

The article first explains how Bitcoin’s halving and ETF withdrawals, combined with Strategy’s massive treasury buys, alter on-chain supply and test the digital-gold thesis against equity and bond benchmarks. It then evaluates critics’ hoarding and liquidity concerns and considers the likely impacts on Bitcoin’s volatility, adoption and decentralized ethos.

Bitcoin’s Shrinking Supply Explained: Halving Impact, Dormant Coins, and ETF Demand

Following the fourth halving on April 20, 2024. Saylor outlined that “Bitcoin happens to be the best performing uncorrelated asset.” He reiterated that, combined with massive institutional withdrawals into spot ETFs, these trends highlight a shrinking pool of available BTC.

Key points to note:

• BTC in circulation: Approximately 19.883 million BTC have already been mined, leaving fewer than 1.12 million coins yet to enter circulation under the 21 million cap.
• Miner rewards: Following the April 2024 halving, rewards fell from 3.125 BTC per block, equivalent to 450 BTC daily. Which is the lowest daily issuance in Bitcoin’s history.
• Dormant supply: Glassnode data show that as of mid-June 2025, roughly 62 percent of all BTC hasn’t moved in over 12 months, signaling a sharply reduced pool of tradable coins.
• Exchange reserves decline: CryptoQuant data show exchange‐held BTC fell from 3.396 million on November 5, 2022, to 3.133 million on November 5, 2024 (–7.7%), before plunging to 2.483 million by June 26, 2025 (–20.8%).
• Share of circulating supply: With ~2.483 million BTC on exchanges, illustrated in the chart below, liquid reserves now account for just 12.5% of supply, levels not seen since early 2018.

How Corporate Treasuries Are Squeezing Bitcoin Supply

Corporate balance-sheet allocations now significantly influence Bitcoin’s dwindling liquid supply. Strategy’s 592,345 BTC stake heads a broader trend. By tapping debt and equity markets to funnel cash into Bitcoin, Saylor has pioneered a “digital capital” playbook that other firms now emulate. 

Some metrics include:

• 3.47 million BTC treasury: Aggregate holdings across 250 entities (public companies, sovereign funds, ETFs) total 3.47 million BTC (≈16.5 % of supply).
• 0.84 million BTC by public companies: From 140 public companies a combined total of 0.84 million BTC (≈4% of supply). 
• Strategy leads with 592,345 BTC: As of June 2025, Strategy holds 3% of all BTC, more than the US and Chinese governments combined.
• Top-100 addresses control 15 %: Whale concentration risks centralization, challenging Bitcoin’s decentralization ethos.

How Bitcoin Outperformed Gold and the S&P 500 by Thousands of Percent

Over the past five years, Bitcoin’s value climbed from $9,300 to $107,000, seeing a total gain of 1,051%, equating to a compound annual growth rate of roughly 62%. By comparison, the S&P 500 index rose from 3,119 points to 6,086 points during the same period, a 95% increase, or about 14% yearly increase.

Key Performance Highlights:

• 10-Year increase: Bitcoin jumped from $248 in June 2015 to $107,000 in June 2025, a 43,131% total gain, or roughly 84% CAGR.
• 5-Year rally: BTC climbed from $9,300 in June 2020 to $107,000 today, a 1,051% gain, or about 62% CAGR.
• Unbroken positive decades: No ten-year period has ever ended in a loss for Bitcoin.
• 5-year gold comparison: Gold rose from $1,740 to $3,324, a 91% gain (~14% CAGR).
• 10-year gold comparison: Gold climbed from $1,170 to $3,324, a 184% gain (~11% CAGR).

Is Bitcoin’s Scarcity Real? Skeptics Warn of ETF Hoarding and Retail Exclusion

Artificial Scarcity via ETF and Institutional Hoarding

• Major ETFs absorbing supply: BlackRock’s IBIT alone holds over 662,500 BTC, about 3% of the total Bitcoin supply (21 million) as of mid‑June 2025. Meanwhile, ETF inflows have totaled roughly $132 billion since approval.
• Liquid supply falling sharply: According to Sygnum, over 1 million BTC have exited exchanges since the end of 2023, and the liquid available supply has dropped 30% in the past 18 months.
• ETFs eating more than mined BTC: In December, ETF demand accounted for 272% of monthly mined Bitcoin, which created a clear supply squeeze.

Result? Exchange reserves have fallen from 1.8 million to 800k BTC. With ETFs mopping up far more than new issuance ($900 million inflow in a single day in June), available tradable coins are disappearing, making scarcity, in part, a product of hoarding, not just protocol-limited supply.

Retail Exclusion: Price Barriers Rising

• Retail crowd priced out: As Bitcoin’s price climbed to $73k in March 2024, large entities like BlackRock and Strategy snapped up 270k and 21k BTC, squeezing out smaller investors .
• Faster-money selloffs exacerbate volatility: Record ETF outflows of $3.3 billion in February 2025 caused a 17% drop in BTC, hitting its worst month since June 2022. This also pushed prices beyond the reach of casual investors.

So, is Bitcoin’s scarcity “real”?

Yes, structurally, due to the hard cap and halving schedule.

But also, artificially amplified by active hoarding via ETFs, custodians, corporations, and governments.

The result? A liquidity-driven scarcity above and beyond what the protocol itself mandates.

Implications for Investors

Is Saylor Causing the Bitcoin Shortage?

There are two sides to Michael Saylor’s role in Bitcoin’s supply squeeze:

• Yes in part: His aggressive accumulation through Strategy contributes significantly to the supply shortage. When a single entity consistently buys more BTC than miners produce, it tightens available supply and amplifies perceived scarcity.
• But not entirely: Even without Strategy’s buying, Bitcoin’s protocol-driven halving and the rise of institutional custody (ETFs, trusts, and corporate treasuries) are already removing large amounts of BTC from circulation. These structural factors would still drive a shortage on their own.

Future Implications of Bitcoin’s Tightening Supply

As Bitcoin’s liquid supply continues to shrink, market dynamics are shifting in ways that could intensify price volatility`, redefine its primary use case, and concentrate influence within the ecosystem.

• Price dynamics: Over the long run, persistent demand against a fixed 21 million supply creates upward pressure that can drive Bitcoin to new all-time highs. While this dynamic supports long-term appreciation, it also reduces market liquidity, potentially amplifying short-term price swings.
• Adoption vs. accumulation: Despite growing institutional interest, on-chain metrics, such as transaction counts, active addresses, and merchant acceptance, remain stagnant. This divergence signals a shift in Bitcoin’s perceived role: from a decentralized currency to a store-of-value asset akin to digital gold.
• Decentralization risks: While Bitcoin is decentralized by design, the concentration of more than 15% of the total supply in a small number of wallets raises concerns. Such centralization could enable a handful of holders to disproportionately influence market sentiment, protocol governance debates, and network direction.

Conclusion

Bitcoin’s supply narrative has reached a critical juncture: the majority of coins have already been mined, new issuance is at an all-time low, and institutions have sequestered millions of BTC in long-term holdings.

Strategy’s massive 592,345-coin position underscores both confidence in Bitcoin’s hard cap and the growing risks associated with concentrated ownership. Whether this trend triggers a true “supply shock” or merely reflects calculated accumulation will play a key role in shaping Bitcoin’s next major price movements.

Investors now face a pivotal choice: lean into the thesis of enduring scarcity and continued upward momentum or remain cautious in anticipation of potential selloffs by large-scale holders.

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