Bitcoin Braces for Supply Crunch as Demand Skyrockets, Warns CryptoQuant

Bitcoin is facing a unique challenge as its supply decreases and demand continues to rise, warns CryptoQuant in their recent report. The introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States has contributed to the surge in demand. This increased demand, coupled with a decreasing supply, is causing a potential supply crisis for Bitcoin by early 2025. CryptoQuant’s analysis reveals that Bitcoin’s sell-side liquidity is at a record low, with the current inventory only able to meet demand for about twelve months. This analysis is based on accumulated addresses, which may underestimate the actual demand for Bitcoin. When considering only US exchanges, the availability of Bitcoin to meet demand reduces to just six months. CEO of CryptoQuant, Ki Young Ju, has discussed this emerging liquidity crisis and highlighted the movement of long-dormant Bitcoins mined in 2010 to new wallet addresses. Despite some brief outflows from BTC ETFs, recent trends point to a reversal with significant net inflows recorded. This data suggests growing investor interest in Bitcoin even as the supply tightens, indicating a potentially transformative period for Bitcoin’s market dynamics.