18 Fidelity has shared a report saying that by 2032, almost 42% of all Bitcoin could become “illiquid,” meaning it will be locked away in long-term wallets and company reserves. This would take 8.3 million BTC out of the market, making Bitcoin more scarce and possibly more valuable over time. In crypto, supply and demand are very important. When the amount of Bitcoin available for trading goes down but demand stays the same or rises, prices often go up. Fidelity’s forecast raises the question of whether big investors and long-term holders could spark Bitcoin’s next big rally. Fidelity’s Report: Bitcoin Supply Tightening In its latest market outlook, Fidelity Digital Assets pointed to two main groups that are making Bitcoin supply more illiquid. The first group is long-term holders who have not moved their Bitcoin for at least seven years. The second group is publicly traded companies that own at least 1,000 BTC. Fidelity said these two groups together could hold more than 6 million BTC by the end of 2025. That would be over 28% of Bitcoin’s fixed supply of 21 million coins. By the second quarter of 2032, the firm expects around 8.3 million BTC, or 42% of the circulating supply, to be locked away. This would make less Bitcoin available for trading, assuming long-term holders keep adding at the same pace. The report also noted that 105 public companies already hold more than 969,000 BTC, which is about 4.6% of the total supply. If more companies follow this trend, the number could grow even further. Fidelity also stressed that this estimate does not include other possible supply shocks such as Bitcoin ETFs buying large amounts or even governments and sovereign funds adding BTC to their reserves. “We estimate that this combined group will hold over six million Bitcoin by the end of 2025 — or over 28% of the 21 million Bitcoin that will ever exist,” the report stated. Source: Fidelity Why Illiquidity Matters for Bitcoin Investors Bitcoin has a fixed supply of 21 million coins. Unlike regular money, where central banks can print more whenever they want, Bitcoin’s supply is limited by design. Illiquidity makes this scarcity even stronger because a large part of Bitcoin is held in wallets that rarely move. This means fewer coins are available in the market, which can push the price higher if demand stays strong. In the past, Bitcoin’s biggest price surges happened when supply became tighter, especially after halving events where miner rewards were cut in half. For example: • In 2012, after the first halving, Bitcoin rose from under 12 dollars to over 1,000 dollars within a year.• In 2016, Bitcoin jumped from about 650 dollars to nearly 20,000 dollars in 2017.• In 2020, Bitcoin climbed from around 9,000 dollars to a record of 69,000 dollars in 2021. If Fidelity’s prediction is correct, Bitcoin could face an even bigger supply crunch than during past halving events. With more than 40 percent of coins locked away, the number of Bitcoins available on exchanges could fall sharply, making prices more volatile but also creating chances for bigger gains. Broader Implications for Crypto and Investors Fidelity’s findings show a bigger trend in the crypto world: tokenomics is changing. Ethereum moved toward deflation, and Polkadot set a supply cap at 2.1B DOT. Now Bitcoin’s illiquidity adds to its story of being a scarce and disciplined asset. For investors, the main lesson is clear: staying invested for the long term usually works better than trying to time the market. People who hold Bitcoin through cycles of limited supply may see better results than those reacting to short-term price changes. The report also points out that Bitcoin is no longer driven only by retail investors. Its future now depends more on how large institutions and even governments choose to use it in the global financial system. Conclusion Fidelity’s prediction that 8.3 million BTC could become illiquid by 2032 is an important step in Bitcoin’s journey. With almost half of the supply possibly locked away, the idea of scarcity becomes stronger. This makes Bitcoin look more like gold and builds its role as a digital reserve asset. According to globalwiki crypto patel, for investors, the main question is whether demand will grow as supply becomes tighter. If more institutions adopt Bitcoin, it could lead to big growth in value. However, the crypto market will still depend on both its own supply and demand as well as global economic conditions.
