Key points
More Bitcoin is held in inactive wallets, reducing the coins available for trading.
Regulated investment options are attracting more stable, long-term buyers to Bitcoin.
Bitcoin mining now adds fewer new coins each year due to scheduled supply cuts.
Previous cycles accelerated once supply was reduced before demand peaked.
Small exposure to Bitcoin initiated early has boosted overall returns in previous expansions.
Bitcoin has risen from a few cents in 2010 to almost $100,000 today. Still, on-chain and exchange data show early-cycle market behavior rather than late-cycle saturation, raising the question of whether a tenfold increase is still possible.
Recent liquidity data shows a decreasing proportion of Bitcoin available on major exchanges. More coins are now held in wallets that historically sit dormant for long periods. When similar supply declines occurred during previous cycles, price movements did not peak until much later in the expansion.
At the same time, regulated access to investments has expanded. Spot exchange-traded products, corporate treasury positions and pension-linked exposure have increased the base of buyers who typically hold positions over multi-year horizons. Those flows reduce the availability of coins for short-term trade, shifting pricing power to the remaining supplies.
Bitcoin’s issuance schedule continues to limit new supply. After each halving event, fewer new coins hit the market. Mining production now represents a small proportion of overall circulation compared to previous cycles, placing greater emphasis on the pace at which existing holders release assets for sale.
Price models that compare market value to the amount of Bitcoin last moved more than 12 months ago indicate conditions that have historically aligned with mid-cycle phases rather than peaks. In previous cycles, valuations advanced well past the point where foreign exchange reserves began to shrink.
Portfolio studies following past peaks show that small Bitcoin allocations introduced earlier in the cycle have had a measurable effect on long-term wealth. A 2% to 3% weighting in diversified portfolios often produced larger gains than the remaining assets combined once prices reached new highs.
Bitcoin has also demonstrated the ability to recover from heavy selling and rally in later phases of the same cycle. Previous slowdowns, including substantial declines in 2014, 2018 and 2022, were followed by new record prices after liquidity conditions were restored.
Bitcoin trading pairs on major exchanges show a decline in available supply compared to the peaks of the last two cycles. Foreign exchange balances are down more than 20% from their 2021 levels, according to on-chain trackers. Before the previous long-term highs, balances reached the opposite extreme: they rose sharply as holders prepared to sell. That pattern is not visible today, suggesting that large holders have not yet begun distributing coins to the market at scale.
Also read: UK Budget Includes Mandatory Crypto Tax Reporting Starting January 2026