BTC exchange reserves hit a nearly 5-year low, market supply and demand may drive prices to pump.

According to statistics from a certain data platform, as of the end of April 2025, the number of BTC held by centralized exchanges has dropped to its lowest point since 2019, with only about 2.5 million remaining, a decrease of 500,000 compared to the end of 2024.

This phenomenon is widely interpreted as a signal that investors are transferring BTC from exchanges to personal wallets. This behavior is often associated with a long-term holding strategy, as withdrawing assets from exchanges can reduce the potential selling risk that arises from operational convenience.

Since the beginning of 2023, the trend of withdrawing BTC from the exchange has been continuously developing. At that time, the BTC reserves on the exchange were about 3.2 million coins. Over the past year, this trend has accelerated with the participation of major institutional investors.

Institutional demand for BTC may become a key factor driving supply shortages. For example, some large companies have recently significantly increased their holdings of BTC, with one company purchasing BTC worth $253 million, directly exacerbating the outflow of tokens on the exchange.

Dennis Porter, a veteran in BTC, stated: "We have never seen anything like this before. A global BTC supply shortage has never occurred. This is a significant bullish signal."

Another well-known digital asset trader pointed out on social media: "The supply of BTC on exchange platforms has fallen to its lowest level since the third quarter of 2018. As of now, only 2.5 million BTC remain on the exchange, a decrease of 500,000 compared to the fourth quarter of 2024. A few days ago, some institutions mentioned that other institutions are continuously buying and withdrawing BTC from the exchange. Supply + Demand = Price Explosion."

According to the latest survey from a certain exchange, over three-quarters of institutional investors plan to increase their allocation of digital assets by 2025, with many institutions already using BTC for portfolio diversification and as a hedge against macroeconomic uncertainty.

In addition, some listed companies are also actively accumulating BTC. Since November 2024, these companies have withdrawn over 425,000 BTC from the exchange, with a total holding of nearly 350,000 BTC.

The reduction in the supply of BTC on the exchange has several impacts on the market, including a decrease in selling pressure. With fewer BTC available for immediate sale, the risk of large-scale sell-offs is reduced, which helps stabilize or even pump the price.

If demand continues to grow while supply remains constrained, the market may face a supply shortage, which historically has often led to a sharp rise in prices.

On-chain analyst Willy Woo commented: "The BTC fundamentals have turned bullish, and the conditions for breaking historical highs are already ripe."

The shift towards self-custody and long-term holding reflects the maturity of the digital asset market, where both retail and institutional investors are increasingly viewing BTC as a strategic asset rather than a speculative tool.

The decline in the supply of BTC on the exchange is widely seen as a bullish signal, but it also means that a surge in demand may trigger increased price volatility. In the coming weeks, the market will verify whether this supply shortage will drive the BTC price into a new rise, or if market sentiment will change with the emergence of new macroeconomic data.