BTC exchange supply has dropped to a near record low, and the market may face a supply shortage.

According to statistics from a certain data platform, as of the end of April 2025, the number of BTC held by centralized exchanges has fallen to its lowest level since 2019, with only about 2.5 million remaining, a decrease of 500,000 compared to the end of 2024.

This phenomenon is widely interpreted as a signal that investors are transferring BTC from exchanges to private self-custody wallets. Such behavior is often associated with a long-term holding strategy, as withdrawing assets from exchanges can reduce the potential selling risk arising from the convenience of platform operations.

Since the beginning of 2023, the outflow of BTC from exchanges has been a persistent trend. At that time, the BTC reserves on exchanges were about 3.2 million coins. Over the past year, this trend has accelerated with the participation of major institutional investors.

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

Dennis Porter, a veteran in BTC, said: "We have never seen this situation before. A global BTC supply shortage has never occurred. This is a significant bullish signal."

A certain asset trader, Cas Abbe, also pointed out: "The supply of BTC on exchanges has fallen to its lowest level since the third quarter of 2018. Currently, only 2.5 million BTC remain on exchanges, a decrease of 500,000 compared to the fourth quarter of 2024. Recently, some institutions mentioned that other institutions are continuously buying BTC from exchanges and withdrawing it. The combination of supply and demand may lead to a price explosion."

According to a recent survey by a certain exchange platform, more than three-quarters of institutional investors plan to increase their allocation to digital assets in 2025, with many institutions already using BTC for portfolio diversification and as a hedge against macroeconomic uncertainty.

In addition, publicly listed companies represented by Strategy are actively accumulating BTC. Since November 2024, these companies have withdrawn over 425,000 BTC from the exchange, with a total holding close to 350,000 BTC.

The reduction in the supply of BTC on the exchange has several effects on the market, including a decrease in selling pressure. With the number of BTC available for immediate sale decreasing, the risk of large-scale sell-offs is reduced, which helps to stabilize or even raise prices.

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

On-chain analyst Willy Woo commented: "The fundamentals of BTC have turned bullish, and the conditions for breaking the historical high are already mature."

The shift towards self-custody and long-term holding reflects the maturation of the cryptocurrency asset market, where both retail and institutional investors are increasingly viewing BTC as a strategic asset rather than a speculative tool.

The decline in BTC supply at the exchange is generally viewed as a bullish signal, but it also implies that a surge in demand could lead to intensified price volatility. In the coming weeks, the market will verify whether this supply shortage will drive BTC prices into a new upward trend, or if market sentiment will change with the emergence of new macroeconomic data.