The number of Bitcoins held for more than a decade is increasing at a faster pace than the rate of new coin mining—550 BTC per day compared to 450 BTC issued per day. This has intensified the Bitcoin supply squeeze, with ‘ancient’ holders eclipsing the newly minted BTC. With 17% of BTC considered illiquid, projections suggest this could rise to as much as 30% by 2026.
A report recently released by Fidelity Digital Assets points to a significant shift in Bitcoin’s supply dynamics post the 2024 halving. The report highlights that the ‘ancient’ Bitcoin supply, which refers to coins held for a decade or longer, has begun to outstrip new issuance. Each day, 550 BTC moves into the ancient supply category, compared to 450 BTC issued.
This trend, when combined with persistent buying from institutional investors, raises an intriguing question: Could this escalating demand drive Bitcoin’s price to $1 million?
The convergence of Bitcoin accumulation and scarcity has resulted in over 17% of the total issuance (3.4 million BTC valued at $360 billion at $107,000/BTC) being classified as ancient supply. This reflects a strong conviction among holders, with daily decreases happening less than 3% of the time. The report suggests this proportion could reach 20% by 2028 and 25% by 2034, further tightening the available supply.
At the same time, capital from institutional investors is growing. Bitwise anticipates Bitcoin inflows to hit $120 billion by 2025 and $300 billion by 2026 in its base case scenario. This scenario is driven by diverse participants including nation-states, US states, wealth management platforms, and public companies. In a bullish case, inflows could exceed $426 billion, absorbing over 4 million Bitcoin (19% of supply), thereby further tightening liquidity.
This institutional accumulation, coupled with the growth of the ancient supply, paints a picture where a significant portion of Bitcoin’s supply becomes illiquid. This could potentially heighten analysts’ price predictions due to increased demand.
To reach a price of $1 million per Bitcoin, a market capitalization of $21 trillion is needed, a tenfold increase from the current $2.10 trillion with 19,880,604 BTC mined, which constitutes 94.66% of the 21 million total. The fixed supply and growing illiquidity could facilitate BTC’s next big milestone. Historical trends after the halving events (2013, 2017, 2021) show rallies driven by reduced supply growth and rising demand, suggesting that current dynamics could lead to a similar outcome.
However, certain challenges still exist. After the 2024 US election, the ancient supply declined on 10% of days—almost four times the historical average—indicating that even long-term holders can sell during periods of volatility. Similarly, five-year holder supply decreased 39% of days post-election, three times the typical rate, correlating with sideways price action in Q1 2025.
This suggests that while illiquidity trends are strong, market conditions can trigger supply increases, potentially moderating price appreciation. However, Bitwise noted $35 billion in sidelined demand in 2024 due to risk-averse policies at Morgan Stanley and Goldman Sachs, which manage $60 trillion in client assets. Its bear case projects over $150 billion in inflows, while the bull case exceeds $426 billion, absorbing 4,269,000 BTC, underscoring significant demand potential.
In conclusion, Bitcoin’s ancient supply and projected institutional inflows paint a picture of increasing scarcity. While reaching $1 million is a lofty target, the current trajectories suggest it is a realistic price target.
