Supply Squeeze Is Reshaping Bitcoin Market, Says Industry Expert

A structural supply squeeze is fundamentally reshaping the bitcoin market, according to Abdumalik Mirakhmedov, Founder and Executive President of GDA, one of the world’s leading bitcoin mining companies. Speaking ahead of the upcoming Bitcoin MENA event in Abu Dhabi, Mirakhmedov said the amount of bitcoin available for trading is “far smaller than most people realise,” citing unprecedented scarcity driven by long-term holding, institutional adoption, and permanently lost coins.

Mirakhmedov highlighted bitcoin’s fixed supply of 21 million coins, noting that nearly 20 million have already been mined. He explained that a growing share of these coins is being removed from circulation by institutional investors, while millions more remain dormant or are believed to be permanently inaccessible.

“Big investors are taking millions of Bitcoins out of circulation, while millions more have been lost over time,” he said. “This growing shortage could turn out to be one of the most important supply squeezes in Bitcoin’s history.”

Industry analysis suggests that, after accounting for long-term holders and an estimated 18 percent of coins lost in inaccessible wallets, the liquid market supply may be as low as six million coins. As a result, Mirakhmedov argues that liquidity is tightening at a pace not seen before.

He emphasised that unlike fiat currencies or traditional commodities, bitcoin’s supply cannot be expanded to meet rising demand. “There is no central authority, and after the cap is reached, no new supply will ever enter the market,” he said. “This fixed structure gives Bitcoin its appeal as ‘digital gold’.”

According to Mirakhmedov, several developments are accelerating the shift from a retail-driven market to one dominated by institutional entities:

• Rise of spot bitcoin ETFs: These funds must hold actual bitcoin in secure custody, removing significant volumes from active circulation.

• Institutional and government adoption: Corporate treasuries, banks offering digital asset custody, and countries such as El Salvador increasingly view bitcoin as a long-term reserve asset.

• Lost coins: Millions of early-era bitcoins are presumed permanently lost due to misplaced private keys or discarded hardware.

“Banks, pension funds, insurance companies, sovereign wealth funds, and asset managers are taking a bigger role in Bitcoin,” he added. “Once Bitcoin is in their hands, it almost never comes back onto the market.”

Mirakhmedov said the shift marks bitcoin’s transition from a speculative asset to a long-term store of value. “The supply squeeze isn’t coming — it’s already happening,” he noted.

He will speak at Bitcoin MENA on 8 December at ADNEC Centre Abu Dhabi, joining a panel on the role of bitcoin mining in the global energy transition alongside Daniel Jonsson, CEO of mgmt Digital Infrastructure Fund, and Ali Alnuaimi, Founder of Shafra.