Bitcoin’s Scarcity and Institutional Demand Could Propel It to $200K

Bitcoin reserves on exchanges have hit their lowest level in seven years, signaling a tightening supply that could push prices higher.

With institutional demand increasing, some analysts believe Bitcoin may be on track for a major rally.

Over the past five years, approximately $504 billion in Bitcoin has been withdrawn from exchanges, according to CryptoQuant. This steady decline in available supply has raised the possibility of a supply shock, which could drive up prices as demand continues to rise.

Meanwhile, Wall Street firms and asset managers are ramping up Bitcoin acquisitions. 10x Research co-founder Markus Thielen recently suggested that market conditions favor price appreciation, with incentives aligning to keep Bitcoin trading at higher levels.

Adding to the bullish momentum, former U.S. President Donald Trump recently issued an executive order prioritizing crypto industry expansion. Bitwise CIO Matt Hougan called the move a major turning point, predicting it could bring trillions into the market.

Hougan, along with analysts from Standard Chartered and Bernstein, has previously projected that Bitcoin could reach $200,000 by 2025. However, given the accelerating pace of adoption and policy support, he now believes that even this target might be too conservative.