Signum Bank: 'Declining Circulating Supply of Bitcoin…Greater Potential for Surge'

There is an analysis suggesting that as the circulating supply of Bitcoin (BTC) drops sharply, the possibility of a price surge is increasing.

According to Cointelegraph on the 4th (local time), Signum Bank stated in a report, “Over the past 18 months, Bitcoin's liquidity has decreased by 30% due to expanding institutional adoption and the emergence of investment products,” adding, “A sharp decline in liquid supply can trigger a demand shock and a price surge.” The report went on to say, “Since the end of 2023, about 1 million BTC have been withdrawn from exchanges. The increased accumulation of Bitcoin through the issuance of stocks or bonds has also had a significant impact on the liquidity drop.”

Furthermore, the bank said that the accumulation by global government agencies is also strengthening the positive outlook. Recently, three U.S. states have passed bills allowing strategic Bitcoin reserves. In addition, it explained that the Pakistani government and the Reform UK party, currently leading the polls for the UK general election, also announced they are considering strategic Bitcoin reserves.

Signum noted, “Official purchases have not yet begun,” but also forecasted, “If purchasing begins, it could become a highly important catalyst for price growth alongside increased demand.” The bank also said that “strengthening its position as a safe asset is a key factor,” stating, “In the face of the deteriorating U.S. fiscal situation and an unstable macroeconomic environment, demand for both Bitcoin and gold has risen sharply.”

Accordingly, the forecast for Bitcoin price increase was re-emphasized. The report added, “In the past, Bitcoin carried greater downside risk, but now the upward potential is stronger,” explaining, “For the past three years, upward volatility has continuously outpaced downward volatility.”

As of 5:39 PM, Bitcoin is trading at $105,484 on the Binance USDT market, up 0.55% from 24 hours ago.