In a startling development for the cryptocurrency market, Bybit’s latest report indicates that Bitcoin reserves on exchanges could be completely exhausted in just nine months. This forecast hinges on the ongoing demand from U.S. Bitcoin exchange-traded funds (ETFs), especially following the recent halving event which slashed Bitcoin’s supply issuance by 50%.
According to the analysis released on April 15, there are merely 2 million Bitcoins remaining in centralized exchanges. With daily inflows of $500 million to Bitcoin Spot ETFs, approximately 7,142 Bitcoins are being withdrawn from exchanges daily. At this rate, all Bitcoin reserves are predicted to deplete by early next year.
This revelation comes as the quantity of Bitcoin on centralized exchanges plummeted to a near three-year low of 1.94 million BTC as of April 16, reflecting data from CryptoQuant.
The cryptocurrency’s price dynamics have been turbulent, with a significant 10% drop last week, bringing the value down to $62,924 per Bitcoin. Despite this, Bybit anticipates a potential recovery and subsequent price increase post-halving due to the reduced supply.
The sector is seeing a notable uptick in institutional interest. Despite a slowdown in weekly inflows to spot Bitcoin ETFs since March, the total accumulated in these funds is substantial. Over 841,000 BTC, valued at roughly $52.9 billion, has been amassed, showcasing a robust $12.7 billion in net inflows since their inception.
Institutional and retail investor allocations to Bitcoin have also seen a steady increase. Since September 2023, institutions have allocated about 40% of their total assets to Bitcoin, with retail investors averaging a 24% allocation. The growing interest from both crypto-native firms and traditional institutions in Bitcoin ETFs and related stocks highlights a broadening acceptance of Bitcoin as a significant investment asset.