During the first week of May 2025, institutional investors staged a record withdrawal of 9,739 BTC—worth more than $1 billion—from Coinbase in a single 24-hour stretch, the largest one-day withdrawal from the exchange this year. This seismic shift coincided with a 90-day US–China tariff suspension that bolstered risk appetite across markets. At the same time, corporate treasuries have accumulated nearly 200,000 BTC—four times the combined inflows into all US spot Bitcoin ETFs—while onchain data from Glassnode reveals illiquid supply hitting an all-time high of 14 million BTC. As the next Bitcoin halving approaches, scheduled for March 26, 2028, supply will narrow even more. This coming together of events implies a supply shock—demand greatly exceeding supply—is looming, even as technicals predict short-term pullbacks.
On-Chain Coinbase Outflows Show Increasing Institutional Demand
On May 9th 2025, Coinbase registered its largest one-day Bitcoin withdrawal of the year when 9,739 BTC, valued at more than $1 billion, were withdrawn off the exchange in a single trading day.Bitwise’s European research head, André Dragosch, highlighted on X that this points to increased demand by hedge funds and corporates wanting direct coin exposure. Cryptonomist also noted that this outflow is the net 2025 highs withdrawal and indicates the trend of institution accumulation and self-custody.
Macro Context: Trade Tensions Ease
Only days before the exodus, the United States and China agreed to a 90-day suspension of most reciprocal tariffs, cutting rates by as much as 24 percentage points to calm trade tensions and avoid a “sudden re-escalation” of hostilities.According to Cointelegraph, Nansen analysts noted that this truce removes a major risk factor, potentially supporting rallies not only in Bitcoin but also in altcoins and equities.
Corporate Treasury Buying Outpaces ETFs
Institutional commitment extends beyond spot markets. During a May 12 interview on Chain Reaction, Dragosch revealed that in 2025 alone, public corporations have purchased nearly 200,000 BTC—four times more than all US spot Bitcoin ETFs combined—an amount roughly equal to the annual new supply of fresh coins. Blockchain.news confirmed that these companies now hold over 3.3 times the year’s new issuance, signaling a sustained corporate embrace of Bitcoin as a treasury asset.
Supply Shock Mechanics Explained
A “supply shock” arises when available coins on exchanges dwindle while demand surges, creating a squeeze that historically propels prices higher. As institutional buyers withdraw significant volumes, exchange reserves shrink, narrowing float and intensifying upward price pressure. During such episodes, even modest inflows can trigger outsized market moves, a dynamic traders liken to “thin float” scenarios.
Illiquid Bitcoin Supply at Historic Highs
Onchain analyst Glassnode reports that the “illiquid supply”—coins held by entities with minimal spending activity—has reached a record 14 million BTC, up by 180,000 BTC in the past 30 days alone. This means that long-term investors, such as whales and corporate treasuries, are transferring huge amounts to cold storage, further limiting the pool of tradable coins for retail investors.
Future Halving Narrows Supply Further
Bitcoin’s monetary policy institutionalizes recurring halving events that reduce miner issuance by half every four years or so. The next halving is expected to occur on March 26, 2028—at which point block reward will decrease from 3.125 BTC to 1.5625 BTC—still limiting new supply within already limited circulation. Halving-induced supply shocks have in the past been succeeded by gigantic bull runs, even though the precise timing of these rallies has not yet been forecast with absolute accuracy.
Short-Term Risks and Corrections
Despite bullish fundamentals, caution is prudent. Overly enthusiastic sentiment and long momentum indicators on the daily and weekly charts can encourage interim pullbacks. Traders must watch for key support levels and profit-taking points, since even supply-driven rallies can stall or correct sharply before resuming.
Institutional On-Ramp Strategies
Large investors tend to favor over-the-counter (OTC) desks and direct exchange withdrawals in order to limit slippage. Coinbase’s institutional unit with 24/7 custody infrastructure, strong encryption, and insurance industry leading is a popular gateway for US corporates looking for compliant, large-volume Bitcoin purchase.
Outlook: What Comes Next
If institutional in- and out-flows continue at the prevailing pace, the spot market is likely to face increasing upward pressure, especially in conditions of thin order books. But near-term macro shocks, from regulatory actions to surprise liquidity events, are likely to temporarily stall the trend at intervals. In the meantime, the combination of record out-flows, optimism about tariff easing, record illiquid supply, and the looming halving means Bitcoin’s scarcity storyline is gaining traction, preparing the market for potential supply-led appreciation throughout 2025 and beyond.
