Bitcoin is on the verge of a major supply shock, with exchange reserves hitting their lowest levels in years, according to data from CryptoQuant. Despite recent price fluctuations, long-term holders are increasing their demand for Bitcoin, pointing towards a potential bullish signal in the near future.

With Bitcoin's growing acceptance in mainstream markets, both corporate and individual whales are aggressively accumulating the cryptocurrency. ETF issuers have been acquiring Bitcoin at a rate 20 times faster than miners can produce, collectively holding more than Satoshi Nakamoto. This surge in demand poses a threat to Bitcoin's overall supply.

CryptoQuant data reveals that exchange reserves currently hold around 2.5 million BTC, marking a three-year low. While ETF issuers and corporate whales are making significant purchases, individuals hold 69% of the total supply. Recent outflows from ETFs indicate a broader supply issue in the market.

The dwindling availability of Bitcoin, with only 5.7% left to be mined and potential losses, sets the stage for a supply crisis. Despite recent price drops, there has been a notable increase in Permanent Holder Demand this week, highlighting the unwavering confidence of individual users and their decreased selling activity. These factors are setting the scene for a potential supply shock in the Bitcoin market.

Renowned figures like Michael Saylor predict a massive influx of billionaire investors acquiring Bitcoin, potentially disrupting the conventional fiat-based valuation of BTC. Moreover, the consideration of establishing Bitcoin reserves in several U.S. states and other countries could further deplete the available supply.

The imminent Bitcoin supply shock may be exacerbated by macroeconomic factors like interest rates and global trade policies. As the market gears up for potential upheaval, the evolving dynamics of Bitcoin supply and demand present a compelling narrative for investors and enthusiasts alike.

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