Bitcoin (BTC) began 2026 with a price move that tested confidence, with BTC rising to nearly $95,000 in the first five days before retesting the $90,000 level.
The move comes after weeks of volatile trading, failed breakout attempts, and a Fear and Greed Index reading of 28 that was firmly in “fear” territory. For traders focused on daily candlesticks, the story felt stagnant.
But beneath the surface noise, institutional demand absorbed twice as much new Bitcoin supply entering circulation. This dynamic frames the coming years as structurally bullish, regardless of short-term price movements.
The US Spot Bitcoin ETF recorded net inflows of 5,150 BTC as of January 7, according to data from CoinGlass. During the same period, Strategy revealed that it purchased 1,283 BTC, bringing its total holdings to 673,783 BTC.
As Bitbo data shows, these two visible institutional channels combined roughly 6,433 BTC out of the market and miners produced an estimated 3,137.5 BTC.
The calculation is easy. Financial institutions absorbed about 105% of new issuance in the first week of the year.
This absorption multiple provides a clearer framework for assessing market structure than price alone. When this multiple is below 1, the market can clear new supply without relying heavily on existing holders. Once issuance increases by a factor of 1-2, the market enters a steady tightening regime and prices need to be changed regularly to induce selling.
Above 2, there will be a persistent shortage of supply and the market will effectively face shortage bidding unless flows suddenly reverse. The first week's pace is at the high end of its range, and if this pace holds, the structure will tilt towards the bullish side.
Corporate finance and long-term storage
The importance of corporate accumulation extends beyond raw BTC numbers.
According to the Bitcoin Treasury, as of early January, public companies held a total of 1,094,426 BTC, which is about 5.2% of Bitcoin's supply limit of 21 million bits. This cohort did not exist at any meaningful scale in previous cycles.
Strategies alone manages 673,783 BTC, the largest single corporate holder, and its financial strategy explicitly treats Bitcoin as a long-term reserve asset with no short-term selling obligations.
Unlike ETF shares, which can be redeemed by authorized participants, coins sitting in a company's treasury remain illiquid unless the board changes course. As these coins move into storage structures designed for multi-year holding periods, each purchase by a company increases supply constraints.
Although ETF flows behave differently, the net positive case yields similar results.
Spot ETF products allow institutional investors and retail buyers to gain exposure to Bitcoin without the need for deposits, and the first week's inflows indicate continued demand despite weak sentiment.
The data shows the volatility of daily flows. The inflow of 7,620 BTC on January 5th was reversed by an outflow of 7,780 BTC two days later, but the net direction remained positive.
Adding up these flows will move coins from liquidity exchange inventories to regulated storage vehicles, enhancing the float available for price discovery.
Reflex mechanisms are important here.
If institutions continue to absorb more coins than the issuance rate, marginal sellers become existing holders who must be induced to exit their positions. Prices will eventually extract supply from long-term holders, but only if they rise enough to turn conviction into a profit-taking opportunity.
The option of existing holders to refuse to sell at current prices will widen the supply shortage and accelerate the need for repricing.
Scenario grid for the next 12-24 months
Looking forward, absorption dynamics can be modeled using annualized run rates.
Assuming a baseline issuance of 164,250 BTC per year and 450 BTC mined daily, a conservative scenario where institutional demand absorbs 0.5x issuance results in tight supply but no supply shock.
In the base case where institutions match issuance 1x, the market would need to raise additional coins from existing holders to clear, and the price becomes a mechanism to balance supply and demand.
In a bullish scenario where financial institutions absorb twice the issuance of 328,000 BTC per year, the likelihood of persistent deficits and price changes increases sharply.
This already happened last year. According to the data, Bitcoin exchange-traded products (ETPs) and listed companies absorbed 696,851 BTC through 2025, about 4.2 times the annual issuance.
Compared to the all-time high of $126,000 recorded on October 6th, Bitcoin's price rose 35% during this supply regime, before dropping its valuation in a year marked by mixed catalysts.
While US regulatory tailwinds have boosted the crypto industry, persistent macro shocks caused by tariffs and inflation uncertainty have dampened risk appetite.
Back in 2026, the first week's pace will be the benchmark for the stress test.
With a net inflow of 5,150 BTC over four trading sessions, the implied run rate is 1,287.5 BTC per session. On an annualized basis, this pace would create extraordinary demand, but it is more useful as a picture of what sustained institutional demand looks like than as a forecast.
Even if the flow rate is half to moderate of that level, the absorption factor remains slightly above 1 and the structural setting is maintained.
Long-term price targets create the framework for a multi-year bull market
Major investment companies have announced price targets far beyond 2026, and the range corresponds neatly to the absorption scenario.
VanEck's Capital Market Assumptions Framework projects Bitcoin as a long-term macro asset with a clear scenario path to 2050 and treats it as a portfolio allocation with multi-decade return potential.
Bitwise has released a 10-year forecast of $1.3 million by 2035, implying a compound annual growth rate of 28.3% from current levels. ARK Invest's 2030 scenarios range from $300,000 in the bear case to $710,000 in the base case to $1.5 million in the bull case, all based on assumptions regarding institutionalization and lower financial standards.
Traditional financial companies make similarly bullish outlooks within shorter time horizons.
Standard Chartered has maintained its 2026 target of $150,000, despite a downward revision from its previous forecast, with long-term forecasts stretching into the $200,000-plus range by the end of the decade.
Bernstein reaffirmed the $150,000 in 2026 and set a peak target of $200,000 in 2027, linking this prediction to broader tokenization supercycle theory.
Citi's latest notes set the 12-month base case at $143,000, the bull case at $189,000 and the bear case at $78,000. This range keeps expectations above current levels while accounting for macro uncertainties.
These forecasts span a variety of methodologies, including capital market assumptions, supply and demand models, and network adoption curves. But they converge on a common theme. That is, sustained institutional demand and constant supply combine to create multi-year structural tailwinds.
The first week's absorption data validates the demand side of that equation. If ETF inflows stabilize at even half their starting pace and corporate buyers continue to inject capital, the imbalance between supply and demand will persist and price targets will become directional rather than speculative.
| hard | horizon | bear target | base target | bull target | method label | sauce |
|---|---|---|---|---|---|---|
| Van Eck | 2050 | $130,000 | $2.9 million | $53.4 million | Capital Market Assumptions + Adopted Scenario Model (Trade Settlement + Reserve Asset Penetration) | Van Eck (January 8, 2026) |
| bit by bit | 2035 | — | $1.3 million | — | Capital market assumptions (10-year forward return model) | Bit by Bit (August 21, 2025) |
| arc investment | 2030 | ~$300,000 | ~$710,000 | ~$1.5 million | Scenario model (allocation by institution + assumption of adoption of TAM style) | Ark (April 24, 2025) |
| standard chartered | End of 2026 (and guidance on longer routes) | — | $150,000 (2026); $500,000 (2030) | — | Bank survey forecast (macro + ETF/corporate demand frame) | MarketWatch Overview of StanChart Notes (December 2025) |
| bernstein | 2026 / Peak in 2027 | — | $150,000 (2026) | $200,000 (cycle peak in 2027) | Sell-side themes (“tokenization supercycle” themes) | Investing.com / Bernstein Notes Coverage (January 2026) |
| city | 12 months | ~$78,000 | $143,000 | $189,000 | Bank scenario range (base/bullish/bearish) | Yahoo Finance coverage (December 19, 2025) |
On-chain fundamentals support the theory
Glassnode's weekly on-chain analytics tracks long-term holder behavior and exchange balances, providing visibility into supply dynamics beyond headline flows.
Exchange inventories have been on the decline over the past year as coins move toward self-custody and ETF structures, reducing the amount of liquid float available for immediate sale. The long-term holder cohort, made up of wallets that have not moved coins for more than 155 days, exhibits an accumulation pattern consistent with conviction rather than distribution.
These actions strengthen the absorption theory. Institutional buyers pull coins into custodial structures for long-term holding, while individual holders move into self-custody as Bitcoin's scarcity becomes better understood.
The halving cycle provides the final structural part.
The Bitcoin issuance schedule is halved every four years, and due to the halving in April 2024, the block reward decreased from 6.25 BTC to 3.125 BTC. At the current issuance rate, only 450 BTC will be in circulation every day, and this number will be halved again in 2028.
This predictable supply schedule means demand doesn't have to increase suddenly to tighten the market. It just needs to be maintained permanently after publication.
The first week's data suggests demand is just that.
What matters in the next 6 months
A bullish case does not require perfect execution or uninterrupted inflows. It requires institutional investor demand to remain net positive on a quarterly basis and for corporate treasuries to continue allocating capital to Bitcoin.
If these conditions hold, the absorption multiplier will remain elevated, the supply shortage will increase, and prices will eventually react.
The alternative of a sharp reversal of trends and the withdrawal of institutions would invalidate this theory, but the current position suggests the opposite.
Public company holdings are at an all-time high, ETF products continue to increase their distributions, and the behavior of long-term holders reflects accumulation rather than distribution.
As these trends unfold, prices may remain flat for weeks or months. Sentiment may remain weak and technical resistance could cap any upside.
However, the basics remained unchanged. Financial institutions outnumber new supply by a 2-to-1 ratio, and if this continues, prices could be significantly higher in the coming years.
The question is not whether Bitcoin will hit new all-time highs, but how long it will take for the market to realize that the imbalance between supply and demand has already determined its outcome.
