Bitcoin Reserves Hit Lowest Level in Seven Years as Hedge Funds Buy the Dip
Bitcoin reserves on cryptocurrency exchanges have reached their lowest levels in nearly seven years, prompting hedge funds to capitalize on the price drop. As of January 13, 2025, a total of 2.35 million BTC was held across exchanges, a low last recorded in June 2018 when Bitcoin was priced around $7,000. Currently, Bitcoin is trading at approximately $90,243.86, reflecting a decline of 4.76%.
This reduction in reserves comes alongside an increase in market activity from institutional investors, particularly hedge funds that are expanding their cryptocurrency portfolios. Andre Dragosch, head of research at Bitwise, pointed out that global crypto hedge funds are actively increasing their exposure to Bitcoin and other digital assets, potentially leading to a supply shock where demand outstrips available supply, which could drive prices higher in the future.
Despite these trends, analysts caution that Bitcoin currently lacks the necessary trading volume to challenge the critical resistance level of $100,000. Historical data shows that in December, U.S. spot Bitcoin exchange-traded funds acquired nearly three times the amount of Bitcoin produced by miners, coinciding with Bitcoin's all-time high of $108,300 on December 17.
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