Fidelity Digital Assets is sounding the alarm on a looming supply shock in Bitcoin. In a new report, the investment giant projects that nearly 28% of all Bitcoin could be effectively locked out of circulation by the end of 2025.
Why Supply Is Drying Up
The report points to two main culprits behind this growing scarcity:
- Dormant wallets: Bitcoin addresses that haven’t moved coins in seven years or more.
- Corporate treasuries: Publicly traded companies holding over 1,000 BTC each.
Together, these groups are expected to control more than 6 million BTC by the close of this year. Given Bitcoin’s hard cap of 21 million coins, such consolidation means fewer coins available for trading — a factor that historically pushes prices higher.
From Free Giveaways to Scarcity Premium
The shift is striking compared to Bitcoin’s early days. Back in 2010, websites handed out five BTC for free just to encourage adoption. Fast forward to today, with prices sitting above $100,000 per coin, and the problem has flipped. Instead of trying to circulate more Bitcoin, the market is grappling with too much supply being locked away.
Long-Term Holders Show No Signs of Selling
Fidelity estimates these long-term holders could control as much as 8.3 million BTC by 2032 if the trend continues. Researcher Zack Wainwright noted that as of June 30, 2025, these groups sat on $628 billion worth of Bitcoin at an average price of $107,700 — more than double their holdings’ value just a year earlier.
Despite the massive unrealized gains, Fidelity doesn’t expect widespread selling. While there have been isolated moves — including the sale of 80,000 “ancient Bitcoins” in July 2025 (coins untouched for a decade) — Wainwright believes the illiquid supply trend will persist.
What It Means for Investors
If Fidelity’s projections hold true, the shrinking liquid supply could intensify Bitcoin’s scarcity premium, adding fuel to long-term bullish arguments. For investors, it underscores the importance of factoring supply dynamics into portfolio strategy, especially as institutional adoption and long-term holding patterns reshape the market.
