Bitcoin Shortage On OTC Desks Raises Alarm

While the bitcoin market seems stuck in a waiting phase, reserves are running low on OTC desks—platforms where institutions buy without moving prices. Strategy, a company that has acquired over 182,000 BTC this year, finds itself on the front line. Facing a drying supply, pressure is mounting. What if the next bullish shock is preparing silently?

In brief

• The bitcoin market is in a quiet phase, but a structural imbalance is looming.
• OTC desks, the main suppliers to institutions, are experiencing a critical drop in reserves.
• Glassnode reports a continuous decline in BTC reserves on exchanges, increasing pressure on total supply.
• The market oscillates between supply shortage and investor caution, hinting at an imminent tipping point.

OTC desks running low

Warning signs intensify in over-the-counter (OTC) markets, where financial institutions traditionally acquire bitcoins without disturbing market prices, even as bitcoin loses momentum. Trader Bedlam Capital Pres revealed a critical situation:

"$MSTR buys most of its bitcoins through over-the-counter (OTC) platforms. Since the beginning of the year, the company has acquired 182,391 BTC."

This figure is significant as OTC desk balances now hold around 155,000 BTC—a historically low threshold—creating an imbalance between available supply and growing institutional demand. Bedlam Capital Pres estimates that pressure will inevitably shift to public exchange platforms, amplifying the risk of a supply shock:

"As OTC platforms dry up, demand will shift to public exchanges, and that is what will uncork the price of the flagship crypto."

This scenario aligns with a general scarcity trend. According to Glassnode, combined BTC reserves on exchanges have fallen to 2.919 million BTC. The market faces several converging factors:
• A continuous decline in OTC reserves, below Strategy’s annual demand alone.
• A significant reduction in reserves on exchanges, signaling a withdrawal of BTC available for sale.
• Persistent institutional demand, led by companies like Strategy, which buys BTC almost every week regardless of price.
This setup strengthens the hypothesis of an imminent supply-demand imbalance, conducive to a rapid price rise if demand continues.

Mass profit-taking: a short-term braking dynamic

Alongside supply shortages on OTC markets and exchanges, the market is experiencing large-scale profit-taking, notably by long-term holders. Glassnode reports that profits realized in one day exceeded $1 billion. Notably:
• $362 million (about 35.8%) came from bitcoins held for 7 to 10 years—a rare event possibly reflecting internal transfers or true market exits.
• Another $93 million came from holders who retained bitcoins between 1 and 2 years.
This indicates an outflow of liquidity from historically stable profiles. This ambiguous context increases uncertainty about the market’s future. On one side, potential supply scarcity; on the other, selling dynamics that could restrain immediate bullish momentum. Despite structural signals favoring a bullish recovery, the market remains tense, weakened by cautious or opportunistic investor psychology. If the supply shock materializes, demand might be less dynamic due to investor reluctance amid uncertainty. Conversely, if demand picks up, the lack of supply could amplify the rise, potentially driving bitcoin toward $148,000.

---

Frequently Asked Questions (FAQ)

Bitcoin Supply Dynamics

Q: What are OTC desks in the context of Bitcoin trading? A: OTC desks are platforms where institutional investors can buy or sell large quantities of Bitcoin without directly impacting the market price. They act as intermediaries, facilitating bulk transactions discreetly. Q: What is causing the Bitcoin shortage on OTC desks? A: The shortage is attributed to a combination of factors, including consistent institutional demand (like that from Strategy, which acquired over 182,000 BTC this year) and a general decline in available Bitcoin reserves on exchanges. Q: How do declining exchange reserves affect the Bitcoin market? A: When reserves on exchanges decrease, it signals that less Bitcoin is readily available for sale. This scarcity, coupled with persistent demand, can increase the pressure on prices and potentially lead to a supply shock. Q: What is a "supply shock" in the Bitcoin market? A: A supply shock occurs when there is a significant imbalance between the demand for Bitcoin and its available supply. This can lead to rapid and substantial price increases if demand outstrips supply. Q: Who is "Strategy" in the context of this article? A: "Strategy" is mentioned as a company that has been a significant buyer of Bitcoin this year, acquiring over 182,000 BTC. This indicates substantial institutional interest and demand in the market. Q: What is the significance of "mass profit-taking" by long-term holders? A: Large-scale profit-taking, especially from long-term holders, can temporarily reduce buying pressure and introduce uncertainty. While it might act as a short-term brake on bullish momentum, the underlying supply scarcity remains a key factor. Q: What is the projected Bitcoin price if a supply shock materializes? A: The article suggests that if demand picks up and the supply shock materializes, Bitcoin's price could potentially reach $148,000.

---

Crypto Market AI's Take

This situation highlights the increasing institutional adoption of Bitcoin, as evidenced by companies like Strategy making substantial purchases. The shrinking reserves on OTC desks and exchanges point to a tightening supply, a classic indicator for potential price appreciation. At Crypto Market AI, our AI-driven trading tools and market analysis are designed to navigate these complex supply-demand dynamics. Our platform leverages advanced algorithms to identify such trends, providing users with actionable insights. For those looking to understand the broader implications of institutional investment and market supply on cryptocurrency prices, our AI-driven crypto trading tools offer detailed analytics and predictions. We also provide comprehensive market analysis that delves into these supply-side factors and their potential impact on future price movements.

---

More to Read:

• Bitcoin Eyes $148k Target Amidst OTC Desk Shortage
• Understanding Bitcoin's Supply and Demand Dynamics
• Institutional Investors Pour into Bitcoin, Driving Up Demand
• The Impact of Limited Supply on Cryptocurrency Prices

---

Source: Bitcoin Shortage On OTC Desks Raises Alarm by Luc Jose Adjinacou, published August 7, 2025.