Bitcoin's onboarding logic undergoes a major shift: from cognitive diffusion to supply contraction

2025-12-29 07:06:12

【Crypto】An interesting observation: the logic of Bitcoin’s bull market is quietly changing.

Looking back at past bullish cycles, the path was very clear—geeks awaken first, then programmers follow, retail investors enter, and finally mainstream financial institutions recognize it. Behind each surge, it is essentially layers of cognitive diffusion.

But after 2024, the game has changed. The emergence of ETFs and institutional-level holdings have completely rewritten the supply and demand dynamics. Now, a large amount of BTC is gradually transforming into a “dormant asset”—institutions buy and just hold, with no intention of selling in the short term. This is similar to the logic of gold flowing into central bank systems.

When chips are locked in long-term, sellers willing to trade frequently and flip repeatedly become increasingly scarce. At this point, the driving force of the price will shift—no longer driven by cognitive diffusion from new entrants, but by the gradual tightening of supply.

To put it simply, the next bull run may not require new narratives and beliefs to drive it. It’s purely because selling pressure is decreasing.

BTC-0.24%

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LuckyBlindCat

· 12-29 07:29

Not now, with how institutions are playing... How can retail investors survive? The supply is becoming increasingly scarce, won't we get cut later?

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ConfusedWhale

· 12-29 07:28

The institution's coin hoarding and locking strategy is somewhat like a replay of the gold boom back in the day. Will supply really become the key variable in the next wave? I don't quite buy into that argument. Before ETFs appeared, we were all doing just fine, and now we're being led by the nose? Scarcity of chips ≠ guaranteed price increase; history is always eerily similar rather than identical. Honestly, this logic sounds a bit too idealistic...

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BuyHighSellLow

· 12-29 07:25

This logic is interesting, but will institutions really hold for that long... I always feel like they'll start reducing their positions someday. Large-volume chips locking in = supply contraction. This explanation sounds reasonable, but in reality, many will rush to dump as soon as a new high is reached. Just say no to new narratives? Well, it depends on whether there are new hotspots later on. Coins without any hype are just stable in price, but that's meaningless. Institutions hoarding coins like central banks hoarding gold? That's a bold analogy... BTC is not a national strategic asset. Actually, we still need to wait and see the market's real reaction. A beautiful theory doesn't necessarily mean you can make money.

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0xOverleveraged

· 12-29 07:24

I've heard this logic too many times, still the same story about scarce supply. Institutional accumulation = never selling? Wake up, they are faster than retail when they want to run. The real issue is, if no new entrants come in, who will take the offload? Tightening supply sounds impressive, but a monetary policy without trading volume is just a joke.

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PoolJumper

· 12-29 07:10

This logic is indeed interesting; institutional hoarding of coins is essentially shorting retail investors. The term "dormant assets" is spot on; BTC is really turning into digital gold. Supply contraction is the key; no matter how many newcomers there are, it's useless. Once the ETF appears, the game is completely changed; we retail investors need to reflect. This wave might really rely on shortages to drive prices up, not stories anymore. Institutions are not selling, so we have to wait; there's no other way. The story of gold applied to BTC sounds reasonable but also a bit hopeless.

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FlippedSignal

· 12-29 07:07

The supply contraction logic is solid; the true floor is when institutions hold on tightly without letting go.

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