Bitcoin Hits $125K as Exchange Balances Drop to Six-Year Low

Core Insights - Bitcoin has reached a new all-time high of over $125,700, surpassing the previous record of $124,500 set in August [1][8] - The surge in Bitcoin's price is accompanied by the lowest levels of Bitcoin reserves on centralized exchanges in six years, indicating a tightening supply amid increasing investor demand [2][4] Market Dynamics - The month of October, referred to as "Uptober" by traders, has started strong for Bitcoin, rebounding from a low of $107,800 in early September [3] - Over the past week, Bitcoin's price has steadily increased due to renewed optimism and reduced liquidity on exchanges [3] Supply and Demand - Data from Glassnode indicates that Bitcoin held on exchanges has dropped to 2.83 million BTC, the lowest since June 2019, while CryptoQuant reports a slightly lower figure of 2.45 million BTC, marking a seven-year low [4] - In just two weeks, over 114,000 BTC, valued at more than $14 billion, has exited exchanges, suggesting a shift towards long-term holding and self-custody [5][8] Institutional Activity - Strategy Inc. has reported that its Bitcoin holdings have surged to $77.4 billion, growing from an initial valuation of $2.1 billion in 2020, reflecting the company's strategy to accumulate Bitcoin as a corporate treasury asset [7] - The current market conditions have led to discussions among OTC desk operators about potential shortages of Bitcoin if prices do not stabilize above $126,000 [6][8]