Reduced Over-the-Counter Bitcoin Reserves Indicate Potential Large-Scale Buying, as BTC Gears up for Potential Surge Above $109K
Bitcoin Reserves Plummeting, Institutional Demand Thriving
The over-the-counter (OTC) Bitcoin stockpiles have witnessed a considerable decline, with balances plummeting from 486,000 BTC in September 2021 to 115,000 BTC as of May 2025—a 4.2-fold decrease, equivalent to nearly $40.8 billion in value. This steep decrease is due to an average daily withdrawal rate of roughly 276 BTC, implying that the current pace could deplete the remaining OTC balance by July 2026.
The depleting OTC Bitcoin reserves indicate a significant reduction in the availability of Bitcoin outside public exchanges, effectively tightening the supply. This development is perceived as net-bullish for Bitcoin in the long term, as lower supply amid sustained demand tends to support upward price pressure.
Institutional investors and high-net-worth entities are suspected to be hoarding Bitcoin via OTC channels, shifting coins into private wallets rather than public exchanges. This shift underscores strong demand from whales and institutions who prefer OTC for large transactions, as it allows them to steer clear of market price fluctuations and liquidity concerns.
Despite the long-term bullish fundamentals, Bitcoin's price action has shown short-term volatility and bearish tendencies. After attempts to breach the resistance at $110,400, prices dipped below $109,000, showing seller dominance in the near term. Notable support levels to keep an eye on include $106,700 and a zone between $102,400 and $100,000, where the price might find solace if further downward movement occurs.
As OTC balances approach depletion, institutions may have no choice but to acquire Bitcoin from public exchanges, potentially driving up trading volumes and impacting liquidity on those platforms. The declining inflows into OTC desks in conjunction with strong purchasing suggest that demand outweighs fresh supply, resulting in a dwindling OTC reserve.
Meanwhile, the European Union (EU) tariff delays have provided a boost to the cryptocurrency market, with BTC's value standing at $109,676, down 0.2% from the previous day but up 4.4% over the past seven days. The postponement of the 50% tariff on EU products from June 1 to July 9 has relatively strengthened investor sentiment, spurring slightly increased risk appetite. Both the cryptocurrency market and European and Asian stock markets exhibited positive reactions, with Bitcoin holding steady around $109k, just 1.94% below its latest all-time high (ATH) of $111,814.
- The decline in OTC Bitcoin reserves indicates a shift in institutional demand, with these entities moving their acquired Bitcoins into private wallets, bypassing public exchanges.
- The dwindling OTC Bitcoin reserves, soon to approach depletion, might drive up trading volumes and impact liquidity on public exchanges as institution investors are forced to acquire Bitcoin from these platforms.
- The tightening supply due to plummeting OTC Bitcoin reserves, coupled with sustained demand, is believed to support upward price pressure in the long term, making Bitcoin a bullish prospect.
- The cryptocurrency market, including Bitcoin, has shown a slight boost due to the EU tariff delays, with Bitcoin's value remaining relatively stable around $109k, despite short-term volatility and bearish tendencies.
- Strong investment demand in the form of institutions and high-net-worth entities hoarding Bitcoin via OTC channels underscores the appeal of cryptocurrency in finance and investment, highlighting the potential for further growth in the blockchain economy.
