Exchange Bitcoin reserves hit a new low in recent years, the market may face a supply shortage

According to statistics from data platforms, by the end of April 2025, the number of Bitcoins held by centralized exchanges had fallen to its lowest level since 2019, with only about 2.5 million coins remaining, a decrease of 500,000 coins compared to the end of 2024.

This phenomenon is widely interpreted as a signal that investors are transferring Bitcoin from exchanges to personal wallets. This behavior is typically associated with long-term holding strategies, as withdrawing assets from exchanges can reduce the potential selling risks associated with trading convenience.

Since the beginning of 2023, the trend of withdrawing Bitcoin from exchanges has been continuously developing. At that time, the Bitcoin reserves of exchanges were about 3.2 million coins. Over the past year, this trend has clearly accelerated with the participation of large institutional investors.

Institutional demand for Bitcoin may become a key factor driving supply shortages. For example, some large companies have recently significantly increased their Bitcoin holdings, with one company purchasing $253 million worth of Bitcoin, directly exacerbating the outflow of exchange tokens.

A senior figure in the Bitcoin field commented: "We have never encountered a situation like this before. A global shortage of Bitcoin supply is unprecedented. This is an important positive signal."

Another well-known cryptocurrency trader pointed out on social media: "The supply of Bitcoin on exchanges has dropped to its lowest point since the third quarter of 2018. Currently, there are only 2.5 million Bitcoins left on exchanges, a decrease of 500,000 compared to the fourth quarter of 2024. A few days ago, reports indicated that institutions are continuously buying and withdrawing Bitcoins from exchanges. Changes in supply and demand will lead to significant price volatility."

A recent survey from a certain exchange shows that over 75% of institutional investors plan to increase their allocation to digital assets by 2025. Many institutions have used Bitcoin for portfolio diversification and as a hedging tool against macroeconomic uncertainty.

In addition, some listed companies are also actively accumulating Bitcoin. Since November 2024, these companies have withdrawn over 425,000 Bitcoins from exchanges, with a total holding of nearly 350,000 coins.

The reduction in the supply of Bitcoin on the exchange has various impacts on the market. First, it alleviates selling pressure. With the number of Bitcoins available for immediate sale decreasing, the risk of large-scale sell-offs is reduced, which helps to stabilize or even push up prices.

If demand continues to grow while supply remains constrained, the market may face a supply shortage, which historically has often led to a rapid increase in prices.

An on-chain analyst commented: "The fundamentals of Bitcoin have turned bullish, and the conditions for breaking historical highs are already in place."

The shift towards self-custody and long-term holding reflects the maturation of the crypto asset market, where retail and institutional investors increasingly view Bitcoin as a strategic asset rather than a short-term speculative tool.

The decline in the supply of Bitcoin on the exchange is widely seen as a positive signal, but it also means that a surge in demand could lead to increased price volatility. In the coming weeks, the market will verify whether this supply shortage will drive Bitcoin prices into a new round of increases, or whether market sentiment will change with the release of new macroeconomic data.