Bitcoin Reaches New Heights: Surging Past $125,000 as Exchange Balances Plummet
Bitcoin has achieved a new all-time high, surpassing $125,700 on Sunday morning, according to data from CoinMarketCap. This milestone marks a significant rebound from its previous record of $124,500 set in August. The surge in Bitcoin’s value comes as centralized exchanges report the lowest levels of Bitcoin reserves in six years, indicating a tightening supply backdrop amid growing investor demand.
Key Factors Contributing to Bitcoin’s Surge
The sharp recovery of Bitcoin marks a strong start to October, often referred to as “Uptober” by traders, following a decline to $107,800 in early September. Over the past week, Bitcoin has climbed steadily, driven by renewed optimism and tightening exchange liquidity. Nate Geraci, president of ETF Store and Nova Dius, commented, “Bitcoin hits new all-time high … And most people still don’t even know what Bitcoin is.” This sentiment reflects the growing interest and investment in Bitcoin, despite its potential still being underestimated by the broader public.
Exchange Balances and Supply Tightening
Glassnode data indicates that the total Bitcoin held on exchanges dropped to 2.83 million BTC on Saturday, the lowest level since June 2019. CryptoQuant posted a slightly lower reserve figure of 2.45 million BTC, placing it at a seven-year low. More than 114,000 BTC, valued over $14 billion, has exited exchanges in just two weeks. This mass outflow suggests a shift toward long-term holding, with Bitcoin moving into self-custody, institutional wallets, or digital asset treasuries.
Market Implications and Future Outlook
The reduction in exchange balances implies a tightening supply, which could lead to upward price pressure. Matthew Sigel, head of digital assets research at VanEck, noted, “Hearing exchanges are out of Bitcoin. Monday 9:30 am might be the first official shortage.” Investor Mike Alfred also shared a call with a major OTC desk operator, who mentioned the potential for running out of Bitcoin within hours of futures markets opening unless the price breaks above $126,000. These sentiments suggest that the market may be approaching a critical point, with potential spot shortages if the price fails to cool down.
Corporate Bitcoin Accumulation and Tax Implications
Strategy Inc.’s Bitcoin holdings have reached a record $77.4 billion, driven by the surge past $124,000. The company began accumulating BTC in 2020 as a corporate treasury asset and has seen its holdings grow exponentially. Recent IRS guidance has also clarified that unrealized crypto gains are excluded from the Corporate Alternative Minimum Tax, which benefits Strategy Inc. with around $28 billion in unrealized profit. This development reinforces the firm’s conviction that Bitcoin is a long-term hedge against fiat depreciation and cements its position as a leading example of corporate Bitcoin accumulation.
For the most accurate and up-to-date information, visit the original source: https://cryptonews.com/news/bitcoin-hits-125k-as-exchange-balances-drop-to-six-year-low/
