There has been a significant rise in institutional demand for Bitcoin (BTC) in recent months after several large investments. Over time, Dan Tabiro, 10T Holdings’ asset manager and co-founder, thinks this could lead to a problematic BTC shortage.
In addition to investments from Square, MicroStrategy, and Stone Ridge, the flow of bitcoin to the Grayscale Bitcoin Trust has increased.
Building on the rapid growth of institutional investment, Tapiro cautions that card merchants may face challenges in the future.
Institutional investors are turning to Bitcoin
In the third quarter of 2020, the Grayscale Bitcoin Trust recorded inflows of $ 1.05 billion. This marks the first quarter of the billion-dollar company and also indicates record-high corporate demand. The company’s quarterly report says:
Shades of Gray recorded the largest quarterly flows ever, topping $ 1 billion in the third quarter, making it the third consecutive record quarter. Annual investments in the Grayscale product portfolio exceeded $ 2.4 billion, more than double the combined revenue of $ 1.2 billion from 2013 to 2019. ‘
The timing of all-time highs in grayscale is noteworthy as it comes a few months after the price of BTC fell below $ 3,600.
Bitcoin plunged $ 3,600 on March 13, after ending a $ 1 billion futures contract. Since then, BTC has been recovering steadily, finally rising above $ 12,500 in early September.
Institutional demand for Bitcoin has grown rapidly after what is now called one of the steepest declines in Bitcoin in recent history, indicating that institutions are experiencing resilience.
With the flow of gray tones steadily rising from institutional investors, Tabiro said:
“A Bitcoin card is possible. The Barry’s Grayscale Trust eats as if tomorrow is not coming. If 77% of all recently recovered becomes 110%, it lights up. Non-mining operations will be removed from the market in tough times. Shorts will be dead.” The price can go to any number. ”
Presentation questions follow the session after the semester
Rumors of a potential supply crisis around Bitcoin also line up with the post-half cycle. On May 11, Bitcoin saw its third cut in half, and historically, a halving will result in an expansion of its upward movement over the next two years.
The halving has proven to have a direct effect on the price of BTC, especially in the long run, as the rate at which the remaining supply of BTC is brought into the market slows.
Bitcoin has a steady supply of 21 million and with every half, the number of BTC miners is decreasing. Consequently, fewer BTCs are available in the market every four years.
In 2016, it took Bitcoin about 15 months to reach its peak after the second half. If a similar pattern is followed, then the year from the latter half will be around the third quarter of 2021.
Incidentally, the current cycle, having been cut in half, is being met by a unique institutional demand.