Bitcoin Supply Shock Looms: Only 2.5M BTC Left on Exchanges

Welcome to today’s issue of Meridian, where Bitcoin's institutional metamorphosis continues to reshape global finance. As exchanges report just 2.5M BTC remaining in their coffers, we're witnessing what may be the early stages of a historic supply shock. Meanwhile, stablecoins surge toward a projected $2T market by 2028, Ethereum leadership pivots toward a product-centric roadmap amid competitive pressures, and the AI-crypto convergence accelerates through real-world DePIN applications.

Whether you're tracking Bitcoin's integration into sovereign reserves, Circle's rejection of a multi-billion dollar acquisition offer, or HiveMapper's impressive 32% coverage of global road networks, this issue unpacks the signals that matter amid the noise.

Dive in as we navigate the currents reshaping the architecture of global value exchange.

Bitcoin as a Macro Asset: Institutional Adoption, Strategic Reserves, and the New Global Order

Bitcoin’s transformation from a niche digital currency to a global macro asset is now the dominant narrative in crypto investing. Over the past quarter, the podcasts reveal a near-universal consensus: Bitcoin is being institutionalized at a rapid pace, with Wall Street, US states, and even national governments moving to accumulate and integrate it into their financial systems.

This is not just about price action—it’s about a fundamental shift in how the world views and uses Bitcoin. The “digital gold” thesis is now being operationalized: ETFs are driving billions in inflows, major brokerages (Charles Schwab, Morgan Stanley) are preparing to offer spot Bitcoin trading, and US states (Arizona, Utah) are passing strategic reserve bills. The US government is openly discussing a “space race” to accumulate Bitcoin, echoing the gold standard era.

Bitcoin is no longer just a speculative asset—it is being woven into the fabric of the global financial system. The convergence of institutional, governmental, and retail adoption is creating a new paradigm, with Bitcoin at the center of the emerging monetary order.

Perspectives: 

• Macro investors like Dan Tapiero and Jordi Visser see Bitcoin as the only asset that can outperform global debasement and liabilities, especially as the US dollar’s reserve status is challenged.

• Institutional leaders (Schwab, BlackRock) confirm that client demand is overwhelmingly for Bitcoin, with Ethereum a “distant second.”

• Bitcoin media (Simply Bitcoin, NLW) highlight the coming supply shock: as institutions and governments compete for a shrinking pool of available BTC, price and liquidity dynamics could change dramatically.

Stablecoins, Tokenized Treasuries, and the Future of Money

Stablecoins have emerged as the “killer app” of crypto, and the latest US Treasury report projects a 10x growth to $2T by 2028. This is not just a crypto story—it’s a global monetary revolution. Stablecoins are rapidly becoming the preferred medium for cross-border payments, savings, and even institutional liquidity, especially outside the US.

Stablecoins are both a massive growth opportunity and a disruptive force for banks, TradFi, and even L1 tokens. The regulatory landscape is shifting, with the Genius Act and Stable Act poised to unlock a wave of bank and TradFi adoption. Tokenized money market funds (BlackRock BUIDL, Ondo, etc.) are blurring the line between stablecoins and traditional finance, offering yield-bearing, fully-backed digital dollars.

Stablecoins are not just a crypto phenomenon—they are reshaping global finance. As regulatory clarity emerges and TradFi enters, the lines between crypto and traditional money are blurring. The next phase will see stablecoins, tokenized treasuries, and yield-bearing digital assets become the backbone of the new financial system, with massive implications for investors, banks, and the global economy.

Perspectives: 

• Macro thinkers (Jordi Visser, Milk Road) see stablecoins as the bridge between the old and new monetary systems, especially as global M2 expands and capital flees traditional assets.

• Builders (Ondo CEO, BlackRock) are racing to tokenize treasuries, money markets, and even gold, creating new yield opportunities and liquidity pools.

• Regulatory clarity is expected to unlock massive growth, with banks and TradFi waiting “day one” to launch stablecoin products once the Genius Act passes.

Ethereum’s Strategic Pivot: L1 Scaling, L2 Maturity, and the Product Roadmap

Ethereum is undergoing a major strategic and cultural shift, with the Foundation’s new leadership (Tomasz, Hsiao-Wei) and a renewed focus on L1 scaling, product-centric development, and L2 decentralization. The “rollup-centric” roadmap is being complemented (or replaced) by a “product-centric” approach, with clear goals: scale the L1, scale blobs, and improve UX.

For investors, this is about Ethereum’s long-term competitiveness and value accrual. The rise of L2s, stablecoins, and competing L1s (Solana, SUI) has put pressure on Ethereum to deliver real product improvements and maintain its position as the “settlement layer” of crypto. The new roadmap aims to make Ethereum relevant, scalable, and user-friendly in a world of fast-moving competitors.

Ethereum is at a crossroads, facing both internal and external pressures. The new leadership and roadmap signal a willingness to adapt, innovate, and compete. For investors, this is a critical moment: Ethereum’s ability to scale, improve UX, and maintain its role as the backbone of DeFi and stablecoins will determine its long-term value and relevance.

Perspectives: 

• Vitalik Buterin and the new EF co-leads are emphasizing operational excellence, faster upgrades, and a focus on user experience.

• L2s (Base, Scroll, etc.) are reaching new decentralization milestones, but there is concern about ETH’s value accrual in a world dominated by stablecoins and L2s.

• Dankrad Feist’s EIP proposes a 100x L1 scaling over 4 years, a dramatic shift from previous priorities.

AI, DePIN, and the Next Wave of Crypto Infrastructure

The convergence of AI and crypto is rapidly becoming one of the most important trends for investors. Decentralized AI, DePIN (Decentralized Physical Infrastructure Networks), and the rise of AI agents are driving a new wave of product and infrastructure innovation, with real-world utility and massive growth potential.

AI and DePIN represent both a new frontier and a major opportunity. Projects like HiveMapper, Helium, and Fractal Bitcoin are building real-world networks with crypto incentives, while AI agents (powered by OpenAI, Anthropic, etc.) are poised to transform how users interact with crypto, payments, and the broader economy. Visa and Mastercard are launching AI agent payment rails, and DePIN projects are attracting significant VC and user interest.

AI and DePIN are not just buzzwords—they are the next wave of crypto infrastructure and product innovation. As AI agents become ubiquitous and DePIN projects scale, investors should watch for real-world utility, user growth, and the emergence of new business models that bridge the digital and physical worlds.

Perspectives: 

• Analysts (Messari, Delphi, Bell Curve) see DePIN as the next phase of crypto infrastructure, with massive potential for user growth and value creation.

• Builders (Ariel Seidman, HiveMapper) emphasize the need for real-world utility and products, not just infrastructure.

• There is debate over whether the bottleneck is infrastructure or product/utility, but most agree that real-world use cases are the key to mass adoption.

As we wrap up this issue, it's clear that Bitcoin's evolution into a macro asset, the explosive growth of stablecoins, Ethereum's strategic pivots, and the convergence of AI with crypto infrastructure are reshaping the financial landscape at an unprecedented pace. These aren't isolated trends but interconnected forces creating a new global monetary and technological order.

The institutional adoption of Bitcoin, the regulatory embrace of stablecoins, Ethereum's product-centric approach, and the real-world utility of DePIN projects all point to crypto's maturation beyond speculation into fundamental infrastructure.

We're curious about your perspective: Which of these four major trends do you believe will have the most significant impact on your investment strategy in the next 12 months, and why? Reply directly to this email with your thoughts—we'd love to feature some reader insights in our next issue.