A Supply Shock could very well be the next catalyst: Huobi, 11th biggest CEX, had it‘s supply decreased from 415k coins to 20k coins in just three years.

While we all keep waiting for the next Bitcoin Halving, which many of us see as the next big Crypto catalyst that could possibly boost prices up, we should know that usually the equation is not that simple, there is also more than one factor that late culminates in a Bull Market. This time one of the biggest factors besides the Halving will also be a supply shock.

​

Total Exchange Balance, chart by MitchellHODL

Since 2020 the BTC Supply on exchanges has been in a complete free-fall and even in this bear market exchanges mostly were not able to buy back more for the incoming demand in the next bull market. This is what exchanges had done in 2018, after the supply was eaten up by the bull market they bought more in the bear market to satisfy the new demand that came in the next bull market.

​

Current BTC holdings and Peak BTC holdings chart, by James V. Straten

The most extreme example of that may be Huobi, the 11th biggest exchange right now. During their peak in 2020 they had over 415k BTC, one of the most, but now just after three years they have decreased to 15k BTC. That‘s a 96% decline of Supply in just three years and they still just have as much supply. Another 96% decline would get them to just about above 500 BTC.

The Supply shock is real and it is not unrealistic at all to think that at least some exchanges will be in troubles during the next bull run, as they won‘t have anywhere near enough BTC to satisfy the impending demand tsunami.