- BlackRock’s Bitcoin acquisition spree has triggered theories of an impending supply crunch.
- A crypto analyst has openly projected a vivid picture of a looming supply crunch.
- The Bitcoin ETF trade volume has hinted at a much larger hidden hunger for the cryptocurrency.
A tremor has rippled through crypto following a bombshell revelation by prominent Bitcoin advocate InvestAnswers. His analysis paints a picture of a looming supply crunch fueled by an acquisition spree by financial behemoth BlackRock due to its Bitcoin ETF.
Bitcoin ETFs Threaten Supply Crunch
The saga unfolds with BlackRock, one of the world’s biggest asset managers, quietly gobbling up a staggering 11,500 Bitcoins in just two days. This might sound like a drop in the digital ocean, but consider this: Bitcoin production approximates around 900 coins daily. Therefore, BlackRock’s appetite represents a whopping 13 days’ worth of fresh BTC.
Adding fuel to the fire, data reveals that BlackRock’s spot ETF merely captured a quarter of the overall Bitcoin ETF trade volume during the same period. This suggests a much deeper hunger, with estimates placing the total BTC pulled from circulation at a dizzying 46,000.
Extrapolating this trend, the crypto analyst paints a stark picture. Should the Bitcoin ETFs maintain their current pace of 23,000 daily BTC withdrawals, their yearly haul would dwarf Bitcoin’s production by 25 times. And remember, retail investors, global ETFs, and other market players are also vying for a slice.
Is Bitcoin’s OTC Market the Major Bull Run Catalyst?
This impending supply crunch would catalyze a Bitcoin price explosion, propelling it to astronomical heights. However, not everyone is buying it. Some experts point out the tendency of institutions like BlackRock to operate in the shadows of over-the-counter (OTC) markets, effectively keeping their buying spree under wraps.
Adding to the intrigue, Coinbase, a custodian for several Bitcoin ETF issuers, reportedly holds a hefty $7 billion worth of BTC in the OTC space. This suggests BlackRock’s headline-grabbing purchases might be just the tip of the iceberg.
On the Flipside
- A supply crunch for an asset like Bitcoin could be a blessing in disguise, as the even lesser availability of something with a limited supply would inevitably drive up demand.
- With the intense institutional interest in Bitcoin, there are concerns that retail investors might face challenges in accessing and participating in the market.
Why This Matters
The financial giant’s aggressive accumulation of Bitcoin, coupled with the potential supply crunch, has the potential to act as a catalyst for a seismic surge in Bitcoin’s value. As institutions like BlackRock operate in the shadows of OTC markets, the unfolding narrative underscores the intricate dance between institutional power and decentralized assets.
To delve deeper into the swift surge of Bitcoin ETF inflow and the role played by financial giants, check out this article:
BlackRock & Fidelity Top Bitcoin ETF Inflow: $1B in Two Days
Curious about the true nature of Vanguard’s investment in Bitcoin mining? Uncover the nuances in this revealing exploration:
Vanguard’s Investment in Bitcoin Mining Is Not What It Seems