Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, is facing a unique supply challenge. According to a report from Bitwise Asset Management, individual investors now control the vast majority of Bitcoin’s total supply. A staggering 69.4% of the 21 million BTC in circulation are held by private investors, leaving only a small portion available for institutional buyers or governments. This concentration of ownership presents a challenge for large institutions seeking to acquire Bitcoin in large quantities, as they are increasingly forced to purchase the cryptocurrency from private holders.
The report outlines Bitcoin’s total supply distribution, which highlights the growing scarcity of the asset. Apart from individual holders, approximately 7.5% of Bitcoin is considered lost, with coins that have not been moved for years. Funds and exchange-traded products (ETPs) collectively control 6.1% of Bitcoin, while the wallet associated with Satoshi Nakamoto, Bitcoin’s pseudonymous creator, holds 4.6%. Governments and businesses own just 5.8% of the total Bitcoin supply.
This distribution means that institutions and large entities, such as corporations, hedge funds, and government agencies, must acquire Bitcoin from individual holders. As Hunter Horsley, CEO of Bitwise, pointed out, “Every new buyer must find a seller. Obvious but important as ever.” This dynamic could lead to further price increases, as institutional buyers must compete for a limited supply.
As Bitcoin adoption continues to rise, scarcity is becoming more apparent. A major factor in the growing sense of urgency is the fact that only 5.7% of Bitcoin remains to be mined, with the final BTC expected to be mined sometime around the year 2140. However, this remaining supply is dwindling quickly, and institutions are struggling to secure enough Bitcoin for their needs. Moreover, the over-the-counter (OTC) markets, which are typically used by institutional buyers to avoid price slippage, are running low on available BTC. An analyst noted that only 140,000 BTC remains in OTC markets, making it difficult for large buyers to source the cryptocurrency without significantly impacting its price.
This scarcity of Bitcoin on OTC markets is creating a potential for a supply shock. In January alone, Bitcoin exchange-traded funds (ETFs) collectively purchased 50,000 BTC, yet the price of Bitcoin did not see the expected surge. This suggests that institutional buyers are attempting to source Bitcoin from OTC markets to avoid causing price volatility on exchanges. However, as these markets dry up, institutional buyers will have no choice but to purchase directly from exchanges, which could trigger significant price increases due to the limited available supply.
One prominent example of institutional buying is MicroStrategy, which has continued its aggressive Bitcoin acquisition strategy. In February 2025, the firm purchased 7,633 BTC for around $742.4 million, bringing its total Bitcoin holdings to 478,740 BTC, worth approximately $47.12 billion. This constant accumulation of Bitcoin by corporate entities like MicroStrategy is putting additional pressure on the available supply.
Additionally, institutional investment firm BlackRock has also added to the demand. BlackRock reportedly bought $1 billion worth of BTC in January and continues to acquire Bitcoin in large quantities. The growing presence of such large institutional players is indicative of the increasing mainstream acceptance of Bitcoin as an investment asset.
The tightening of Bitcoin supply is becoming even more pronounced as the cryptocurrency’s adoption continues to grow at an accelerating pace. In fact, BlackRock recently reported that cryptocurrency adoption has reached 300 million users, surpassing the rate at which the internet and mobile phones were adopted. This rapid adoption is setting the stage for future price increases, especially as institutional players scramble to acquire Bitcoin.
Brian Armstrong, CEO of Coinbase, also weighed in on the potential for continued Bitcoin adoption. Armstrong predicted that Bitcoin adoption could reach several billion people by 2030, reflecting the increasing interest in the cryptocurrency as a store of value and investment asset.
As the supply of Bitcoin continues to tighten and institutional demand grows, the cryptocurrency could face a major supply shock. Institutions may soon find themselves forced to buy Bitcoin directly from exchanges, which could cause the price to surge. Given the current market dynamics, this scarcity could drive Bitcoin prices to new highs in the near future. With the majority of Bitcoin’s supply held by individual investors and OTC markets running low, the race for Bitcoin is on, and institutions may find themselves paying higher prices as they compete for the remaining supply.
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