Your favorite crypto news blog

There May Soon Be a Bitcoin “Shortage” Amid Institutional Adoption

Bitcoin 2020/10/16 02:06 by Nick Chong

Bitcoin has stagnated over recent weeks and months after peaking at $12,500 in August. The leading cryptocurrency currently trades at $11,450, stuck in the middle of the range between $10,000 and $12,500. Throughout this, institutions have increased their exposure to Bitcoin en-masse, with tens of thousands of coins being accumulated.

A prominent macro thinker and gold bull thinks that this may mean that there may soon be a Bitcoin “shortage.” This shortage will likely drive prices higher as demand for BTC outweighs the market supply, which is only compounded by the May 2020 halving.

Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom

Expect a Bitcoin Shortage?

Over recent months, it’s been clear that institutions have increased their exposure to Bitcoin at a rapid clip.

Just recently, Stone Ridge Asset Management announced that it had picked up 10,000 Bitcoin. The $10 billion asset manager explained that it sees the cryptocurrency as a crucial investment in the shift towards open monetary systems. It was added that the COVID-19 pandemic and the subsequent macroeconomic fallout showed them that the traditional way of constructing portfolios may be flawed.

Dan Tapiero, the co-founder of Gold Bullion International amongst other companies, thinks that shortages of Bitcoin are possible as the cryptocurrency is accumulated en-masse:

“SHORTAGES of #Bitcoin possible. Barry’s  @Grayscale trust is eating up btc like there is no tomorrow. If 77% of all newly mined turns into 110%, it’s lights out. Non-miner supply will get held off mkt in squeeze. Shorts will be dead. Price can go to any number.”

Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin

Not the Only One That Thinks So

As unlikely as a Bitcoin “shortage” sounds, other individuals think that it may take place.

Pseudonymous cryptocurrency trader “Light” recently said that Bitcoin is in the midst of a “sell-side liquidity crisis” as retail and institutional investors accumulate the coin en-masse:

“Bitcoin is experiencing the beginnings of a sell-side liquidity crisis. It has always been like oil on crack. Production is entirely inelastic, demand meanwhile, is reflexive.” 

It is yet unclear when an inflection point will be reached where supply won’t be able to meet demand.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Photo by Katie Harp on Unsplash
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
There May Soon Be a Bitcoin "Shortage" Amid Institutional Adoption

0 Like(s)

You should also read...

Bitcoin 16/11/19 13:00 by Nick Chong
Bitcoin Permabull Comes Out Against ETF Hopefuls; Here’s Why
The launch of a U.S.-regulated Bitcoin exchange-traded fund (ETF) has long been the dream of cryptocurrency investors — they believe that such a vehicle would catalyze mass inflows, kicking off BTC&...
Read More
Bitcoin 28/11/19 22:30 by Nick Chong
Going to Talk Bitcoin at Thanksgiving? Here’s a Good Strategy
For some reason or another, discussing Bitcoin at the Thanksgiving dinner table has become somewhat of a meme. Thanksgiving, after all, is when you spend time with the closest people in your life, the...
Read More
Bitcoin 02/12/19 13:00 by Nick Chong
Under 6.8m Bitcoin Changed Hands in the Past Year: Does it Indicate Positive Sentiment?
One of the many beauties of Bitcoin is that the blockchain backing it is simultaneously pseudonymous and transparent, meaning that you can look into, say, the number of BTC in existence but not know w...
Read More
Bitcoin 11/12/19 13:00 by Nick Chong
Crucial Indicator Shows a Massive Bitcoin Move is Likely Following 30% Drop
Over the past few weeks, Bitcoin (BTC) has finally started to slow, establishing $7,000 as support and $7,800 as heavy resistance; the cryptocurrency hasn’t broken above or below those boundarie...
Read More
Bitcoin 29/03/20 04:01 by Nick Chong
These 3 Factors Show Bitcoin Has Further to Fall After Hitting $6,000
Over the past 24 hours, Bitcoin hasn’t performed too well. After maintaining the $6,700 support for a number of days, the cryptocurrency tanked on Friday evening in a move that shocked investors...
Read More