After the introduction of Bitcoin spot exchange-traded funds (ETFs) in the United States, there has been a noticeable increase in the withdrawal of Bitcoin from exchanges. Reports indicate that over $9.5 billion worth of Bitcoin has been removed from these platforms, with a significant decrease of 136,000 BTC in exchange balances since this trend began on January 11. This shift in the supply dynamics of Bitcoin is favoring bullish investors, as the volume of Bitcoin available for trading on exchanges has dropped to its lowest level since April 2018, leaving only 2,320,458 BTC in circulation.

Furthermore, a substantial withdrawal of 22,000 BTC (equivalent to $1.54 billion) on March 27 marks one of the largest single-day withdrawals. The impact of the newly operational U.S. spot Bitcoin ETFs is proving to be crucial in the cryptocurrency market, with notable movements like a significant transfer of USD Coin (USDC) to Coinbase catching the attention of industry experts. Speculations have arisen regarding increased buying pressure following this transfer, underscoring the evolving dynamics in the market.

As experts monitor the ETFs' effect on Bitcoin's supply, there is anticipation of a potential "squeeze" where demand exceeds available supply, ultimately influencing prices. This situation is expected to intensify, especially in light of the impending block subsidy halving event in mid-April, which will further reduce the new BTC entering the market. Charles Edwards, the founder of Capriole Investments, emphasized the significance of this upcoming halving event, suggesting that Bitcoin will become scarcer than gold. With increased institutional demand expected through ETFs, a supply squeeze from the halving, and Bitcoin's recognition as the world's hardest asset, April is anticipated to be a pivotal month for the cryptocurrency industry.