Here's Why Bitcoin's Scarcity Matters Now More Than Ever

Key Points

• Bitcoin's largest holders are unwilling to sell it.

• Financial institutions are looking to buy it.

• Miners aren't producing much compared to daily demand.

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When governments loosen the liquidity taps and public debt piles up, investors instinctively reach for assets whose supply cannot be increased by the vote of a committee.

Bitcoin (CRYPTO: BTC) was engineered so its supply schedule could not be edited on a whim. In the current macroeconomic environment, and with reasonable assumptions about the near future, that inherent scarcity is going to be more valuable than ever before. Here's why.

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Image source: Getty Images.

Scarcity is this asset's main pillar of value

Bitcoin's protocol specifies that there can only ever be a maximum of 21 million coins in circulation.

Changing that cap is theoretically possible, but practically infeasible because the very holders who secure the network would have to vote to dilute themselves, and they won't do that. Progress toward mining the total possible supply of the coin is slow, and only going to get slower over time. The 2024 Bitcoin halving cut the block reward for miners from 6.25 bitcoins to 3.125, which means that new supply got cut to roughly 450 coins per day -- which is the most new issuance that there will ever be on a daily basis from here on out.

Scarcity, while baked into Bitcoin's protocol, is also the credo of many of the largest so-called whales and long-time holders. The pool of ancient coins (coins that are unmoved for more than 10 years) is growing faster than miners can create new coins. On average, roughly 566 bitcoins per day are aging into that long-term and totally static bucket, which is another form of supply tightening, assuming the holders continue to leave their coins untouched.

Long-term holder supply more broadly has sat near record highs in 2025, a signal that a large cohort is price-insensitive and prefers to store their coins rather than trade them. So new buyers are, on average, being forced to pay higher and higher prices to secure ownership. And as an investor, those are exactly the conditions that you want to see if you were considering a purchase.

Then, on top of the aforementioned factors, there are new buyers who never existed before. U.S. spot exchange-traded funds (ETFs) aggregate demand from retirement accounts and financial institutions that prize operational simplicity. Net flows remain lumpy day to day, but the cumulative data show persistent cash inflows into ETFs, leading to buying. The practical effect is fewer coins sloshing around on exchanges and more sitting in investment vehicles designed for long holding periods.

In comparison to gold, which adds new supply every year from mines, Bitcoin's issuance path shrinks mechanically. The more these two forces compound, the more any incremental demand must bid against a thinner float available for public trading.

What to watch next

Bitcoin's scarcity and the behavior of its holders and institutional buyers are determinants of its performance over the long term. In the short and medium term, macroeconomic factors pose significant risks to the coin's price, even if those same factors actually support the long-term investment thesis.

For example, global debt hit a fresh record of more than $324 trillion in the first quarter, and the debt-to-gross-domestic-product ratios of the U.S. and other major industrialized economies remain heavy. Historically, that mix nudges policymakers toward looser monetary stances during downturns, which supports asset prices that do well when liquidity rises, like Bitcoin.

In Europe, the European Central Bank (ECB) has already cut its main interest rate several times this year, reinforcing the notion that parts of the world are easing into a weak growth patch. If the Federal Reserve follows with a gradual cutting cycle, which it's currently widely anticipated to do, it would add another liquidity tailwind. But scary headlines about economic collapses are probably not going to play well for the coin, if they occur. Bitcoin isn't yet proven as a safe asset.

Therefore, investors should treat Bitcoin as a long-horizon allocation whose upside is tied to a supply schedule you can model and a demand curve you can watch via policy and flow data. Making small, automatic additions to your position via dollar-cost averaging (DCAing) during quiet weeks, and resisting the urge to dump your coins, is how you let engineered scarcity do its work.

If the macro picture tilts toward easier money and ETFs keep taking coins off the market, this thesis will only get stronger.

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Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.