Bitcoin Supply Squeeze Unwinds as 28,000 BTC Return to Exchanges

Bitcoin Exchange Supply Reverses

Bitcoin’s exchange supply reached its highest level since June 15, Santiment Intelligence shared on Aug. 17, challenging claims that spot bitcoin exchange-traded fund (ETF) buying was rapidly exhausting tradable inventory.

The initial six-week decline removed about 33,000 $BTC from exchanges, lowering balances roughly 2.5% from 1.337 million on June 12 to 1.304 million on July 28. Santiment’s Supply on Exchanges metric captured the entire decline and subsequent refill within one data series.

The firm stated in its Aug. 17 X post, summarizing the complete balance reversal tracked by the metric:

“Balances bottomed on Jul 28 and have climbed to ~1.332M by Aug 16, about 28,000 $BTC back on, roughly 84% of the drain undone.”

ETF Demand Can Bypass Visible Exchange Wallets

Strong ETF inflows and rising exchange reserves measure different parts of bitcoin’s market structure, so they can occur simultaneously without creating a data conflict. The Securities and Exchange Commission’s in-kind approval allows authorized participants to deliver bitcoin directly to eligible crypto funds in exchange for shares, rather than requiring every creation to begin with a cash-market purchase.