Fidelity estimates that by 2025, approximately 28% of Bitcoin's total supply, or over 6 million BTC, will be held by long-term holders and publicly traded companies, and this figure is projected to grow to 8.3 million BTC by 2032.

This increasing illiquid supply is mainly due to holdings in dormant addresses and large institutional holdings, which have remained stable and are not actively traded.

Long-term Bitcoin holders have maintained their holdings since 2016 without significant decreases, indicating strong accumulation and a reluctance to sell.

The combined value of these holdings is approximately $628 billion, with an average price of around $107,700 per BTC, doubling compared to last year.

This shift towards increased scarcity is driven by long-term holders and institutional investors, reflecting a market mindset that favors scarcity over abundance, especially given Bitcoin's capped supply of 21 million.

The report highlights two main groups with potentially illiquid holdings: long-term holders who haven't moved their BTC in at least seven years, and publicly traded companies holding at least 1,000 BTC, with the latter increasing their holdings this year.

Publicly traded companies currently hold over 969,000 BTC, representing 4.61% of the total supply, and their holdings have remained relatively stable.

As the illiquid supply grows, it could lead to market shocks and upward price pressure, since fewer coins are available for trading and liquidity diminishes.

Recent sell-offs by Bitcoin whales, totaling nearly $12.7 billion in the past month, have caused a 2% price dip, raising concerns about potential impacts if large holders decide to sell more.

Despite profit-taking, experts believe the trend of shrinking liquid supply will continue, although some early signs of capitulation, such as the sale of 80,000 'ancient Bitcoins,' have emerged.

These two main groups are expected to hold over 6 million BTC as of 2025, with projections indicating this could rise to 8.3 million BTC by 2032, significantly reducing circulating supply.