Bitcoin's scarcity is becoming a pressing reality, anticipating a potential supply shock as only 7% of Bitcoin remains available for circulation following the recent halving, which cut miner rewards in half. Long-term holders are increasingly locking their coins in cold storage or institutional holdings, resulting in dwindling liquidity. Michael Saylor's firm, MicroStrategy, is a major player, holding approximately 3% of all Bitcoin and continuing to buy more, fueling fears of a supply crisis. Concurrently, rising institutional demand, especially from spot Bitcoin ETFs, has intensified the tightening market by pulling coins off exchanges. The recent halving reduced block rewards to 3.125 BTC, provoking concerns about market concentration, as a handful of entities hold significant portions of Bitcoin, challenging decentralization. A liquidity crunch is evident, with exchange balances dropping, making the market susceptible to volatility. While Bitcoin will not run out, its usable supply is drying up, potentially leading to price spikes if demand continues to surge. The dynamics suggest that a slow-burning BTC supply squeeze is underway, compelling investors to closely monitor the evolving market.

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