Bitcoin faces supply crunch as Fidelity warns of vanishing circulation
Nearly one-third of Bitcoin’s total supply will effectively vanish from the market by the end of 2025, fueling expectations of a potential supply shock.
A new report from Fidelity Digital Assets projects that roughly 28% of all Bitcoin, or more than 6 million coins, will be locked away in long-dormant wallets and corporate treasuries.
Drivers of scarcity
Fidelity researchers identified two key groups driving this trend: addresses that have shown no activity for at least seven years, and publicly traded companies holding 1,000 or more BTC. Together, these groups already account for a vast portion of Bitcoin supply, holding over $628 billion in value as of June 30, 2025, when BTC traded around $107,700. The figure represents more than double the value of their combined holdings just a year earlier.
This growing immobility marks a stark contrast to Bitcoin’s early days. In 2010, websites gave away tokens for free to encourage adoption. Now, as the total supply remains fixed at 21 million, the pool of unavailable Bitcoin continues to grow, making each circulating coin more scarce. Fidelity estimates that by 2032, as much as 8.3 million BTC could be locked away.
Market implications
The trend has wide-reaching implications for investors and market structure. Fidelity’s Zack Wainwright noted that while some early signs of profit-taking have emerged—such as the sale of 80,000 “ancient Bitcoins” in July 2025—the broader pattern suggests illiquidity will persist. He cautioned that investors should account for the shrinking supply in shaping long-term portfolio strategies, as demand-side pressures could amplify future price increases.
“Whether long-term holders begin to unlock gains remains uncertain,” Wainwright said. “But the trajectory points toward a continued tightening of liquid supply.”
Outlook
For now, Fidelity believes the illiquid supply trend is unlikely to reverse. With institutional adoption rising and corporate holdings consolidating, the risk of a sudden supply crunch could reshape Bitcoin’s market dynamics.
Investors, Fidelity suggests, may need to prepare for heightened volatility as the available pool of BTC dwindles.
It was earlier reported that Altcoins are under pressure ahead of Fed policy announcement.
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