Data from Glassnode shows that Bitcoin (BTC) held on centralized exchanges has dropped by about 20% in the past 12 months. This suggests that investors are withdrawing their Bitcoin to the cold storage with a view of possibly holding them for the long term. This has reduced the available supply while the demand has continued to increase.
The arrival of exchange-traded funds could increase the supply crunch further. After the success of the TSX Purpose Bitcoin exchange-traded fund, Canada could launch the second Bitcoin ETF by Galaxy Digital Capital Management, a subsidiary of Galaxy Digital. The approval of Bitcoin ETFs in Canada could place further pressure on U.S. regulators to be more accommodative in their approach of evaluating BTC ETF proposals.