Bitcoin’s currency reserve metric is at a 3-year low.
According to data from June 19, 2024, Bitcoin currency reserves, the total Bitcoin exchange rate, fell to a 3-year low.
An analysis from CryptoQuant currently has 2,825,703 Bitcoin (BTC) left on exchanges. By January 2024, the Bitcoin exchange balance hovered around 3,039,000.
Low currency reserves, sometimes called currency balances, imply low selling pressure and supply shocks due to relatively low supply for purchases.
Pressure from Bitcoin ETFs
Following the approval of Bitcoin ETFs in the United States in January 2024, asset managers such as BlackRock have put additional pressure on Bitcoin supply. As of June 6, BlackRock's iShares Bitcoin Trust (IBIT) holds 274,000 bitcoins. BlackRock's ETF is only 1 of 11 Bitcoin ETFs currently trading in the United States.
By May 2024, monthly inflows into digital asset funds had reached $2 billion, primarily into Bitcoin investment funds and products. According to the June 17 Coinshares Weekly Fund Flow Report, Bitcoin investment vehicles hold approximately $73 billion worth of Bitcoin globally.
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However, that report recorded $621 million in weekly outflows of Bitcoin investment vehicles for the week of June 15, 2024. This marked the largest and most significant inflow since the week of March 22, 2024.
Coinshares were buoyed by “more hawkish than expected” comments from the Federal Reserve, suggesting the Fed will raise interest rates, leading to capital flight from fixed-supply assets like Bitcoin.
Although institutional interest is growing, industry experts, such as Franklin Templeton CEO Jenny Johnson, believe institutional adoption is far from complete. “This is really the first wave of early adopters, and I think the next wave will be much larger institutions,” Johnson told CNBC.
If Johnson's prediction turns out to be true, institutional capital will continue to flow into bitcoin, putting additional pressure on the exchange's low supply in the coming months.
April 2024 halved
Additionally, the supply of Bitcoin is further constrained by the reduction in block mining rewards following the April 2024 halving event.
Before the recent halving, miners collected 6.25 bitcoins for each block they successfully mined, following the halving miners now collect 3.125 bitcoins for successfully mining a block.
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