November, 2025

The Bitcoin Liquidity Shock of 2026: Why There Won’t Be Enough BTC for Everyone

November, 2025

“Bitcoin isn’t scarce because of hype. It’s scarce because no one is selling.” — DNA Crypto.

Bitcoin is heading toward a structural liquidity crisis. And almost no one is prepared for it.

While price debates dominate headlines, something more fundamental is happening under the surface: Bitcoin supply is vanishing from the market.

– ETFs are hoarding
– Institutions are dollar-cost averaging
– Bitcoiners aren’t selling
– Exchanges have the lowest BTC float in 14 years
– Miners are holding more post-halving
Sovereigns are accumulating quietly.

This isn’t just a theory — it’s already in the data.

A supply shock is no longer possible… It’s inevitable!

From 3 Million to 2.1 Million: The Collapsing BTC Float

In 2017, more than 3 million BTC were actively circulating on exchanges and available for sale.
Today, that number has collapsed to under 2.1 million — the lowest since 2010.

More than 75% of all Bitcoin in existence is now considered “illiquid,” meaning it hasn’t moved in over six months.

As we explored in Why Institutions Prefer OTC Trading, much of today’s BTC demand never touches exchanges at all.

How ETFs and Spot Products Remove BTC From Circulation

Since early 2024, U.S. and European Bitcoin ETFs have absorbed hundreds of thousands of BTC.
These holdings are not traded — they are held in cold storage by custodians to back shares.
That means permanent removal from the liquid supply.

– ETFs do not just create new demand.
– They destroy the available supply.

See What Bitcoin ETFs Mean for Europe for institutional impact analysis.

Why Europe’s Regulatory Clarity Accelerates Demand

MiCA is now entirely in effect across the EU, creating clear rules for:

– Asset classification
– Custodial responsibility
– Exchange operations
– Reporting frameworks

For treasuries, family offices, and funds — this clarity means green light.
We’re now seeing European firms move BTC to cold storage with regulated custodians across the continent.

Read more in Bitcoin for Treasury Strategy.

Post-Halving: Fewer Coins, More Demand

April 2024 marked the fourth Bitcoin halving.
Block rewards dropped to 3.125 BTC.

This reduced daily issuance to around 450 BTC, while ETF demand alone can exceed 1,000 BTC per day.

Every halving cuts supply.
Every halving increases stress on liquidity.

But this halving coincides with:

– Record ETF inflows
– Sovereign accumulation
– Corporate treasury adoption

– The result? Demand is outpacing new supply 2:1.

Illiquid Supply Is at All-Time Highs

According to on-chain data:

– Over 15 million BTC are now in wallets that haven’t moved in 6+ months
– Exchange balances are at 14-year lows
– Long-term holders dominate the supply side

– This trend is detailed in our piece on Bitcoin and Cold Storage Trends.

Bitcoin is becoming a “held” asset — not a traded one.

Corporate Treasuries and Sovereigns Are Becoming Long-Term Holders

Quietly, Europe is seeing:

– Board-approved treasury allocations
– Cold-storage custody agreements
– Bitcoin added as a strategic reserve
– Holdings by energy firms, wealth offices, and sovereign wealth funds

This is no longer just retail or high-net-worth adoption.
It’s institutional accumulation at the national scale.

We explore this trend in Europe’s Quiet Bitcoin Revolution.

Why Liquidity Crises Trigger Price Surges

In every prior Bitcoin cycle:

– 2013
– 2017
– 2020–2021

Supply squeezes preceded significant price breaks.

The tighter the float, the faster the re-pricing.
Liquidity crises are like dry forest floors — they ignite instantly.

This time, the structure is different:

– Institutions are holding
– Retail is holding
– Sovereigns are holding

There is no marginal BTC seller.

What Makes 2026 Different: Demand > Speculation

Previous cycles were speculation-driven.
This one is demand-driven.

– Spot ETFs
– Regulated custody
– Treasury and sovereign reserves
– Post-halving supply cuts

The world is onboarding Bitcoin — and there’s not enough Bitcoin to go around.

Conclusion: The Supply Shock Is Already Here

– The data is precise.
– The trend is irreversible.
– The timeline is now.

Bitcoin’s supply is becoming immobile.
Its demand is accelerating.

There won’t be enough BTC for everyone.

Those who prepare now will not be caught flat-footed in 2026.

Image Source: Adobe Stock
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or investment advice.

The Great Bitcoin Divide: Why Self-Custody and Institutional Custody Must Coexist

November, 2025

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“Self-custody protects the ethos. Institutional custody expands the network. Bitcoin wins by enabling all three.” — DNA Crypto.

There is no debate in Bitcoin more emotional, more ideological, or more misunderstood than the question of custody.
Self-custody is sacred to Bitcoin’s origins.
Institutional custody is essential for Bitcoin’s global adoption.

– Both are growing.
– Both are necessary.
– Both are misunderstood.

The future of Bitcoin will not be determined by one custody model replacing the other.
The coexistence of both will shape it — each serving a different class of users, investors, and institutions.

Why Self-Custody Matters

Self-custody is the foundation of Bitcoin’s philosophy — the idea that individuals can control their wealth without intermediaries.

The benefits are clear:

– You hold your private keys
– You eliminate custodial risk
– You escape freezes, seizures, or restrictions
– You become your own bank
– You gain complete financial freedom

Self-custody protects individuals from:

– Bank failures
– Political overreach
– Capital controls
– Payment censorship
– Asset monitoring

For many Bitcoiners, self-custody isn’t optional — it’s the whole point of Bitcoin.

We’ve written more on this in Bitcoin and Financial Autonomy.

Why Institutional Custody Matters

But large-scale adoption cannot rely solely on individuals securing their own keys.
Institutions, corporations, funds, and high-net-worth offices require:

– Insurance
– Audited controls
– Regulated custodial frameworks
– Multi-signature governance
– Disaster recovery systems
– Regulatory reporting compliance

For these entities, self-custody is not viable.

Institutional custody enables Bitcoin to:

– Enter regulated financial markets
– Be held on corporate balance sheets
– Be included in ETFs and retirement funds
– Be safeguarded at an industrial scale
– Be audited in compliance with EU frameworks

Institutional custody doesn’t dilute Bitcoin — it expands its reach.

This transition is detailed further in Bitcoin for Treasuries and Why Institutions Prefer OTC Custody.

Why Both Sides Often Misunderstand Each Other

Self-custody advocates fear:

– Centralisation
– Custodial failure
– Government capture
– Re-creation of the old financial system

Institutional users fear:

– Human error
– Loss of private keys
– Compliance breaches
– Audit issues
– Operational risk

Both sides are right — and both sides are wrong.

Bitcoin was built for everyone.
– Not just individuals.
– Not just institutions.
– Everyone.

Europe’s Unique Advantage

Under MiCA, Europe now defines clear rules for:

– Qualified custodians
– Safeguarding of digital assets
– Capital requirements
– Audit standards
– Insurance expectations
– Reporting obligations

This regulatory clarity means institutional custody in Europe is safer and more transparent than anywhere else in the world.

At the same time, Europe preserves the legal right to self-custody — something not guaranteed in all jurisdictions.

Europe may become the global leader precisely because it supports both models.

The Real Future: A Hybrid Custody Paradigm

Three parallel custody systems will shape Bitcoin’s global future:

Self-Custody
For individuals, sovereignty, and long-term savings.

Institutional Custody
For corporates, funds, ETFs, and large entities.

Federated & Multi-Signature Models
Blending self-custody with shared, decentralised governance.

The future isn’t either-or.
The future is “yes, both.”

What Bitcoiners Must Understand

Bitcoin does not need one winner.
Bitcoin’s strength comes from redundancy, optionality, and resilience.

– Self-custody protects the ethos
– Institutional custody expands the network
– Hybrid models create flexibility

Bitcoin wins by enabling all three.

Image Source: Envato Stock
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or investment advice.