Cryptocurrency Market Shift: Demand Shocks Replace Supply Shocks

The cryptocurrency market has been experiencing a significant shift in recent times, with demand shocks replacing supply shocks as the primary driver of price action. This change is driven by institutional flows and a new tug-of-war between legacy accumulation and modern distribution.

According to data from BloFin, approximately 94% of the total Bitcoin supply has already been mined, reducing the issuance reduction from the 2024 halving to negligible levels. As a result, the shock to supply was mathematically insufficient to move a trillion-dollar market on its own.

The shift towards demand shocks is being driven by institutional investors, with US spot Bitcoin ETFs accumulating $16.11 billion in cumulative net inflows throughout 2025, while Ethereum ETFs saw $9.57 billion. This trend is expected to continue as institutions diversify into altcoins and governments implement clearer regulations and pilot programs.