Bitcoin’s Supply Crunch Echoes the Hunt Brothers’ Silver Squeeze — But This Time It’s Decentralized

By CryptoCaster Investigative Team | May 22, 2025

From $69K to $111K: This Isn’t Just a Rally

Bitcoin smashing through the $111,000 mark is more than just a milestone—it’s the symptom of a deeper structural shift. What we are witnessing isn’t just bullish momentum or halving euphoria; it’s a rapidly materializing supply crunch of historic proportions. One with eerie echoes of the 1980 silver squeeze led by the Hunt brothers—only this time, it’s decentralized, global, and written in immutable code.

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I. The Ghost of Silver: A History Worth Remembering

In the late 1970s, two wealthy oil tycoons—Nelson and William Hunt—attempted to hedge against inflation by amassing massive quantities of silver. They believed fiat money would collapse, so they sought hard assets.

• By early 1980, the Hunt brothers had cornered over 100 million ounces of silver, driving the price from $6 to a staggering $50 per ounce.
• They didn’t act alone—credit-fueled derivatives, international partners, and a supply-limited commodity amplified the squeeze.
• Ultimately, regulators intervened, the COMEX changed margin rules, and the price of silver collapsed back below $11 within weeks.

The legacy of the Hunt brothers became a cautionary tale: what happens when too much demand chases too little supply.

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II. Bitcoin Today: A Digital Replay, With New Rules

Now fast forward to Bitcoin in 2025. The similarities are chilling—except for one major difference: Bitcoin has no central exchange to change the rules.

Here’s what’s unfolding:

• Supply held on exchanges is at a 7-year low, now under 11.6% of total circulating BTC.
• Institutional buyers, sovereign wealth funds, and ETFs are scooping up Bitcoin without redistributing it.
• DeFi platforms are locking wrapped Bitcoin in smart contracts.
• Miners post-halving are hoarding rewards, not selling.

In other words, a supply corner is occurring again—but this time it’s systemic, not orchestrated. The squeeze is happening organically, powered by conviction, automation, and macroeconomic alignment.

III. The Role of ETFs: Modern Day Financial Cannons

Just as the Hunt brothers used futures and international markets to leverage their silver holdings, today’s players use spot Bitcoin ETFs as their vehicle:

• BlackRock’s iShares Bitcoin Trust (IBTC) now holds over 520,000 BTC, the second-largest custodian globally.
• Fidelity, Franklin Templeton, and ARK have collectively added millions of retail and institutional buyers to the demand side.
• Crucially, ETFs are one-way flow mechanisms for most buyers—once BTC enters cold storage, it rarely re-enters the market.

This mirrors the Hunt brothers’ tactic of removing silver from circulation, drying up liquidity.

IV. Miners, Scarcity, and the Halving Effect

Adding fuel to the scarcity fire is the April 2024 Bitcoin halving, which cut block rewards to 3.125 BTC:

• Many miners are holding instead of selling, anticipating higher prices.
• The cost to mine 1 BTC now exceeds $54,000, making miners less likely to sell unless prices are significantly higher.
• Mining firms, especially public ones, are strategically timing sell-offs to maximize profit and reduce dilution.

The result is that fresh BTC entering the market is now negligible, creating a tighter squeeze than the Hunt brothers could have engineered even with billions in leverage.

V. DeFi Locks and Tokenized BTC: Another Layer of Drain

In the DeFi world:

• Over 380,000 BTC is currently locked in protocols such as tBTC, rsBTC, and Babylon, fueling lending, staking, and yield strategies.
• This tokenization removes BTC from tradeable supply, reducing sell pressure.
• These contracts often lack liquidity escape hatches, meaning even if prices spike, the BTC remains locked for set terms.

The financialization of Bitcoin has created a recursive demand loop, where owning BTC begets yield, which incentivizes more hoarding.

VI. Market Scenarios: Lessons from the Past, Warnings for the Future

🟩 Digital Corner Achieved

• BTC moves toward $150K–$180K as demand continues unchecked.
• OTC desks dry up. Public exchanges see historic premiums.
• This becomes the first decentralized corner of a global asset.

🟨 Hunt-Level Volatility

• Illiquidity leads to dramatic price swings.
• A single institutional exit or whale liquidation could crater prices temporarily, just like when COMEX halted silver margin buying in 1980.

🟥 Regulatory Reflex

• Governments might push back—capital controls, ETF restrictions, or transaction limits—especially in emerging markets.
• However, Bitcoin’s decentralized infrastructure means enforcement is uneven, and price suppression could backfire.

VII. Conclusion: The Hunt Brothers Reimagined in Code

What the Hunt brothers tried to do with silver—corner a finite asset to hedge against fiat collapse—is now happening again with Bitcoin. But this time, there’s no singular villain. No collusion. No rule changes. Only protocol-enforced scarcity.

Bitcoin’s rise to $111,000 may well be the first organic, decentralized liquidity squeeze in financial history. And unlike silver in 1980, there’s no warehouse to raid, no margin call to trigger collapse, and no COMEX to save the system.

“What happens when the system itself can’t meet the demand for truth in money?”

We are entering an era where belief in digital scarcity is outpacing every traditional tool of monetary policy and market control. And the deeper question isn’t “When will this bubble pop?”—but rather:

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