According to the June 2025 monthly investment outlook report from Sygnum Bank, the circulating supply of Bitcoin is rapidly tightening, creating conditions for potential price increases, especially against the backdrop of rising demand.
Sygnum analysts point out that the liquidity supply of Bitcoin (BTC) has decreased by 30% over the past 18 months, primarily driven by the accelerated entry of institutional investors and the rise of Bitcoin acquisition tools.
These entities, including exchange-traded funds (ETFs) and corporate buyers, continue to withdraw Bitcoin from exchanges, a behavior that is typically interpreted by the market as a bullish signal.
"The rapid shrinkage of Bitcoin's liquidity supply is creating favorable conditions for demand shocks and upward volatility," the report states.
Since the end of 2023, the balance of Bitcoin on exchanges has decreased by approximately 1 million BTC. As more funds issue stocks or bonds to purchase Bitcoin, this trend is accelerating, further depleting the market's available supply.
At the same time, geopolitical and fiscal uncertainties, particularly the weakening of the dollar and the surge in U.S. debt, are driving investors towards the cryptocurrency market.
Further fueling this momentum, three U.S. states have recently passed legislation allowing the holding of Bitcoin reserves. New Hampshire has officially signed such legislation into law, with Texas likely to follow suit.
Meanwhile, interest on an international scale is also growing. Sygnum emphasizes that the government of Pakistan and the Reform UK party, currently leading in election polls in the UK, have both announced plans to explore Bitcoin reserve strategies.
Although official purchases of Bitcoin reserves have not yet materialized, Sygnum states that once these plans begin to be implemented, they could become significant catalysts for price increases, "not only because of the demand they create but also due to the market signals they release."
Institutional buying is not the only influencing factor. Recent market dynamics have reinforced Bitcoin's image as a safe-haven asset. The report notes that the sell-off of U.S. Treasury bonds amid deteriorating fiscal conditions has boosted demand for Bitcoin and gold in May.
Sygnum also points out that Bitcoin's volatility characteristics are improving. Over the past three years, upward volatility has consistently exceeded downward volatility, indicating that the market is maturing and institutional participation is increasing.
"While historically, downward shocks have often been greater than upward shocks for Bitcoin, in the past three years (since June 2022), upward volatility has consistently exceeded downward volatility," the report states.
Sygnum also mentions that Ethereum (ETH) is regaining momentum after years of relatively lackluster performance. The recent Pectra upgrade has driven strong revenue growth and rekindled interest among major financial institutions in building tokenized platforms on Ethereum and its layer-two networks.
Related: Atkins states that the SEC will adopt a "notice and comment" mechanism to formulate cryptocurrency policy.
Original: “Sygnum: The Shrinking Liquidity Supply of Bitcoin (BTC) May Trigger Price Breakthrough”
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