Bitcoin’s Safe-Haven Status Strengthened by Treasury Turmoil and Dollar Weakness, Says Sygnum Bank
Bitcoin’s role as a safe haven is receiving renewed attention amid U.S. Treasury market disruptions and a weakening dollar, according to Sygnum Bank’s latest market outlook released Tuesday.
The report highlights a significant decline in Bitcoin’s liquid circulating supply — down an estimated 30% over the past 18 months — which could lead to heightened price volatility in the near term. Sygnum analysts note that “Bitcoin’s liquid supply is getting severely constrained while positive demand trends continue, creating the foundation for upside shocks in the price.”
Key demand drivers fueling this dynamic include growing inflows into Bitcoin ETFs and increasing openness among governments to hold Bitcoin reserves. This is creating speculation of a “demand shock” scenario, where a surge of buyers chase a shrinking pool of available coins.
Since late 2023, over one million BTC have been withdrawn from exchanges, largely by ETF investors and corporate treasuries accumulating for long-term holding. This reduction in liquidity poses challenges for traders seeking to exit positions during price surges or to cover short trades.
Sygnum also points to broader macroeconomic factors reinforcing Bitcoin’s appeal. Falling U.S. Treasury prices combined with soaring federal debt are prompting investors to turn back to traditional safe havens like gold — and increasingly, Bitcoin. This resilience under fiscal stress is positioning Bitcoin as a preferred hedge in today’s uncertain environment.
Emerging geopolitical catalysts are further enhancing demand prospects. Three U.S. states have passed Bitcoin reserve legislation, with New Hampshire already signing its bill into law and Texas potentially next. Internationally, countries such as Pakistan and political figures in the U.K. are considering official Bitcoin reserve allocations, which, while largely symbolic now, could create substantial future market demand if enacted.
Overall, Sygnum concludes that the ongoing cryptocurrency cycle is far from reaching its peak, with foundational demand and constrained supply setting the stage for potential volatility and growth ahead.
