On June 4, Swiss Sygnum Bank pointed out in its market outlook report released on Tuesday that the circulation of Bitcoin is shrinking sharply, and the estimated liquid BTC supply has dropped by 30% in the past 18 months. This sharp liquidity depletion may lay the groundwork for upward price fluctuations in the coming months.
"Against the backdrop of continued strong demand, Bitcoin liquidity supply is facing severe tightening, creating conditions for an upward price shock," analysts wrote in the report. The report specifically emphasizes that the surge in inflows into Bitcoin ETFs, coupled with the increasing openness of governments to Bitcoin reserves, is triggering market expectations of a "demand shock" - a situation where there are too many buyers and too few tokens in circulation.
Sygnum data shows that more than 1 million BTC have flowed out of trading platforms since the end of 2023, with ETF institutions and corporate funds being the main hoarding forces. This trend puts additional pressure on traders, who may face the dilemma of insufficient liquidity to close positions or replenish margin when the market fluctuates violently.
At the same time, turmoil in the U.S. Treasury market and a weaker dollar are further strengthening Bitcoin's safe-haven properties. The report pointed out that falling U.S. Treasury prices and swelling federal debt are driving investors back to gold and Bitcoin. The resilience of cryptocurrencies in these fiscal headwinds shows that they are becoming a new choice for hedging tools.
