The upcoming Bitcoin halving is expected to cause a significant reduction in the supply of Bitcoin on cryptocurrency exchanges within the next nine months. This is due to the 50% supply issuance cut that will occur during the halving. A recent report by Bybit suggests that if the inflows from United States Bitcoin exchange-traded funds (ETFs) continue, exchange reserves of Bitcoin will eventually run dry after the halving.
According to data from CryptoQuant, Bitcoin reserves on centralized exchanges reached a three-year low of 1.94 million BTC on April 16. This decline in exchange reserves coincides with a larger market slump, which has seen Bitcoin’s price drop by over 10% in the past week, reaching $62,924 as of 1:36 pm UTC, according to CoinMarketCap.
Despite the current correction, Bybit, the world’s third-largest exchange, anticipates that Bitcoin prices will rebound. The report also highlights the increasing institutional interest in Bitcoin. While weekly inflows into spot Bitcoin ETFs have been slowing down since March, they still amounted to over $199 million last week. This is a decrease from the $2.58 billion inflows recorded in the week beginning March 11, as reported by Dune.
Dune’s data also shows that Bitcoin ETFs have accumulated over 841,000 BTC, worth $52.9 billion, with net flows of $12.7 billion since their launch. Additionally, Bybit’s asset allocation report from February 24 reveals that institutional investors now allocate an average of 40% of their total assets to Bitcoin, while retail investors allocate an average of 24%.
Bybit acknowledges that both crypto-native firms and traditional institutions are increasingly gaining exposure to Bitcoin through ETFs or proxy stocks like MicroStrategy. The exchange expects more institutions to follow suit. Furthermore, a separate report suggests that the Bitcoin halving will lead to a more sustainable BTC mining industry.