Sygnum Predicts Massive Bitcoin Supply Shock as Institutional and ETF Demand Slash Liquidity, Eyeing Upside to $110K+

Sygnum Bank’s recent reports underscore an intensifying Bitcoin supply shock, as the cryptocurrency nears past all-time highs. Over the past 18 months, Bitcoin liquidity on exchanges has dropped by 30%, primarily due to surging institutional demand, robust inflows into spot Bitcoin ETFs such as ARKB and FBTC, and increased corporate treasury allocations. ETF inflows have reached up to $375 million in a single day, tightening supply even further alongside April’s halving event, which halved the rate of new BTC issuance. The bank highlights growing government interest in holding Bitcoin reserves as another emerging driver. Sygnum notes that these conditions—high demand, low liquidity, and historic ’whale ratio’ lows—lay strong foundations for significant demand-driven price volatility. The consensus among analysts is shifting from a previous focus on downside risk to increasing upside potential, with price targets above $110,000 now widely discussed. However, traders are warned that while upside volatility could be powerful, reduced liquidity also magnifies downside risks during sharp corrections. For crypto traders, the current environment signals bullish momentum for Bitcoin but also heightened price swings, requiring vigilant risk management.