by In a groundbreaking study published by River, a U.S.-based bitcoin financial services firm, data reveals that businesses are accumulating bitcoin at an astonishing rate—four times faster than miners can produce it. This significant trend has implications for the cryptocurrency market, influencing supply dynamics and potentially impacting Bitcoin’s price.
Understanding River’s Research Findings
River’s analysis utilized a Sankey-style infographic, which visually represents the flow of bitcoin between various entities. The infographic, dated August 25, was shared on social media platform X, showcasing how bitcoin is moving within the ecosystem. With outflows displayed on the left and inflows on the right, the infographic clearly illustrates the net daily movement of bitcoin.
Defining ‘Businesses’ in Bitcoin Terms
The term “businesses” as defined by River encompasses a broad range of entities. This category includes bitcoin treasury companies, such as Strategy, that publicly hold BTC, as well as traditional companies that maintain bitcoin on their balance sheets. Through extensive research, including public filings and custodial address tagging, River estimates that around 1,755 BTC flows into business-controlled wallets each day. In stark contrast, new miner supply is projected to be approximately 450 BTC per day in 2025, following the anticipated April 2024 halving event, which will reduce the block subsidy to 3.125 BTC per block.
The Impact of Bitcoin Halving
The halving event is a crucial milestone in the Bitcoin ecosystem that reduces the rewards miners receive for validating transactions. With bitcoin blocks being mined approximately every 10 minutes, leading to about 144 blocks daily, this results in a total of around 450 BTC newly issued every day. The figures provided by River underscore the staggering absorption rate by businesses, which stands at nearly four times the rate of new issuance from miners.
Institutional Inflows: A Game Changer
Additionally, River’s infographic highlights substantial institutional inflows. Funds and ETFs alone account for around 1,430 BTC per day in net inflows, further elevating total absorption levels in comparison to new bitcoin issuance. Smaller amounts flow to other entities, approximately 411 BTC per day, while governments account for around 39 BTC per day. Interestingly, there is also a steady flow of about 14 BTC per day into “lost bitcoin,” which represents coins deemed permanently inaccessible due to key loss or other factors.
Understanding Net Outflows
On the flip side, individuals represent the largest net outflow, with a staggering –3,196 BTC per day. However, it is important to note that this does not necessarily imply retail investors are selling off their holdings. Instead, it indicates a transfer of bitcoin from individual-held addresses to those classified as institutional. This shift in ownership patterns is crucial for understanding the evolving landscape of Bitcoin.
The Implications of Supply Tightening
River’s findings suggest a significant takeaway: when inflows to businesses, funds, and governmental entities exceed the new issuance from miners, the available supply of bitcoin tightens. This tightening of supply could have profound implications for Bitcoin’s market dynamics and price movements. As institutional investors accumulate more bitcoin, the potential for price appreciation increases, driven by the fundamental law of supply and demand.
Cautions in Interpretation
While River’s infographic provides valuable insights, it is essential to approach the figures with caution. The data is based on estimates rather than a precise census of blockchain activity. River’s methodology relies on a combination of wallet tagging, public disclosures, and external databases, which may not capture every holding or could misclassify certain addresses. Additionally, net inflows do not always correlate with direct spot market purchases. For instance, a business wallet showing an increase of 1,755 BTC per day could reflect over-the-counter (OTC) transactions, custodial transfers, or treasury reshuffling rather than solely exchange-based purchases.
Ownership Patterns and Future Dynamics
Understanding the flow of bitcoin is crucial for investors and enthusiasts alike. The infographic illustrates where coins are ending up, shedding light on the shifting ownership patterns within the cryptocurrency market. If businesses and funds continue to absorb more bitcoin than miners produce, it suggests that institutions could play an increasingly significant role in shaping Bitcoin’s supply dynamics.
Conclusion: The Future of Bitcoin Supply
As the landscape of bitcoin ownership continues to evolve, investors need to pay close attention to these trends. River’s research indicates that institutional accumulation could lead to tighter supply and potentially higher prices in the future. For those interested in getting involved in the cryptocurrency market, understanding how to buy bitcoin and other cryptocurrencies is essential. Whether through exchanges like Kraken, Binance, or eToro, the opportunities are vast. Stay informed and be prepared for the changes that lie ahead in the world of bitcoin.
Meta Description: Discover how businesses are accumulating Bitcoin at four times the mining rate, according to River Research. Learn about institutional inflows, supply dynamics, and what this means for the future of Bitcoin in our comprehensive analysis.
