₿ Current Status and Future Trends of the Bitcoin Market: An 'Institutionalized' Bull Market Under Supply and Demand Imbalance
Date: December 14, 2025
The current Bitcoin market is at a historic turning point. We are witnessing a dramatic shift from a 'retail-driven speculative asset' to a 'value storage backed by institutions and sovereign entities.' Despite recent price fluctuations around $90,000, the underlying market structure has reached unprecedented heights.
The following is an in-depth analysis of the current supply and demand situation in the Bitcoin market, institutional behavior, and future trends.
One, Current market supply and demand: Liquidity exhaustion and 'digital scarcity'
The current core contradiction in the market lies in the sharp decline of circulating supply. With institutional hoarding and the arrival of the 'dormant tide', the actual amount of Bitcoin available for trading in the market is becoming increasingly scarce.
* Sharp decline in exchange balances: The Bitcoin balance on global exchanges has now dropped to only 2.76 million coins. Compared to the end of 2024, this figure has decreased by 440,000 coins. This indicates that a large number of Bitcoins are being transferred from the public market to private wallets, institutional vaults, and ETF funds, causing the market's 'liquidity pool' to shallow.
* Permanent lock-up: An astonishing trend is that approximately 4,000 Bitcoins are effectively removed from circulation daily due to lost private keys or being held long-term.
* Long-term holders' dominance: On-chain data shows that holders with a holding period of over 155 days account for 70.4%, with a total of about 13.75 million coins. This indicates a high degree of market consolidation with very light selling pressure.
Key signal: Historical patterns indicate that when exchange balances fall below 2.5 million coins, it is highly likely to trigger a liquidity scramble, resulting in a single-day surge of over 10%.
️ Two, Institutional and sovereign behavior: From 'wait-and-see' to 'control'
A significant feature of 2025 is the deep integration of 'institutionalization' and 'sovereignization'. Bitcoin is no longer just a decorative asset on corporate balance sheets but is becoming part of national strategic reserves.
1. Deep involvement of the U.S. government and state levels
Various states in the U.S. are leveraging policy dividends to accelerate deployment, viewing Bitcoin as a tool to combat inflation and increase fiscal revenue:
State governments' strategic actions impact
Texas has included Bitcoin in its emergency reserves, currently holding 32,000 coins, establishing its crisis hedging capability.
Florida has allocated $8.7 billion in pensions to Bitcoin ETFs, benefiting millions of people.
Ohio has tax and corporate incentives allowing companies to pay taxes in Bitcoin, with businesses currently holding 18,000 coins.
2. Characteristics of top-tier capital operations
* The Trump family: According to market analysis, they control 23% of the computational power in the U.S. (approximately 150,000 Bitcoin-related equities), using Bitcoin as an important political and economic bargaining chip.
* Wall Street giants: JPMorgan has not only launched JPM Coin but has also mandated that employees learn about crypto, demonstrating the absolute desire of traditional financial behemoths to control this field.
Three, Price driving factors: Historical patterns and halving effects
The logic supporting future price increases mainly stems from fundamental changes in supply and demand relationships:
* Historical cyclicality: Looking back at history, every time exchange balances fall below 3 million coins, the average increase of Bitcoin within the following 1-1.5 years can typically reach 480% - 600%. The current balance of 2.76 million coins suggests we may be in the early or mid-stage of this super cycle.
* The explosion in the year following the halving: Bitcoin often performs strongly in the year following a halving event. Historical data shows that the price increase in December of the year after halving is significant (e.g., 48% increase in 2020, 31% increase in 2024).
* Seasonal market trends (Christmas effect): Statistical data shows that the probability of Bitcoin rising in December reaches as high as 83%, and in December of the year following the halving, the average increase even reaches 39%.
️ Four, Risk warnings and operational suggestions
Although the long-term trend is positive, the risk of short-term volatility should not be overlooked.
* Short-term correction risks: Currently, prices hover around $90,000, just a step away from the psychological barrier of $100,000. If market sentiment becomes too heated, it could trigger a leveraged sell-off similar to 2021, leading to a sharp decline.
* Geopolitical and computational power competition: The U.S. currently controls 42% of global computational power, with Bitcoin becoming a 'digital sovereignty tool' in geopolitics, which brings uncertainty in policy games.
* Policy arbitrage risks: Federal subsidies have reduced the holding costs for state governments by 42%, a competitive edge that ordinary investors find hard to reach.
Operational suggestions:
1. Pay attention to ETF inflow signals: Closely monitor the net inflow of Bitcoin ETFs on a single day, as a signal of crossing $500 million typically indicates the start of a new round of upward momentum.
2. Defensive layout: Caution should be maintained when positioning before the holiday, with strict stop-loss levels suggested to avoid being 'washed out' due to reverse volatility caused by short-term liquidity exhaustion.
The current Bitcoin market exhibits typical characteristics of 'institutionalization + sovereignization'. Under the dual effects of supply-demand imbalance (reduced circulation) and policy intervention (state reserves), Bitcoin's 'digital gold' property is being reinforced.
Although short-term volatility is the norm in the crypto market, as more and more long-term holdings are locked in, every dip may become a 'buying opportunity' for scarce assets.
