Institutions Now Hold 3% of BTC’s Circulating Supply. What Does This Mean?

Institutional investors and big corporations now hold 460,000 BTC, which is 3% of the total BTC supply in circulation. What does this mean for Bitcoin in the short and long term?

As it stands, it is clear that institutional investors are storing up Bitcoin. As at the time of writing, they were holding 3% of the total supply. Most of them locked in long term holdings. Data available shows 24 entities have amassed more than 460,500 BTC, which is equivalent to $22 billion at Bitcoin’s current price.

This is excluding the about 3 million BTCs that are lost forever. If institutions keep locking away Bitcoin and buying at their current pace, a shortage in supply is imminent.

The current list of holders includes MtGox K K, which has close to 141,690 BTC ($6.6 billion). Next is Block.one with an estimated 140,000 BTC $6.5 billion). MicroStrategy also has about 71,000 BTC ( $3.3 billion) and this week Tesla bought 38,500 BTC (about $1.8 billion).

It is expected that holding Bitcoin in reserve will soon be a standard. Analysts believe that the crypto market is being seen as an hedge against inflation.

In comparison to gold, there’s no way to accelerate the supply of the pioneer cryptocurrency through additional mining. BTC has a finite supply that could go into circulation.

marketcap of tradable assets

Institutional investors and large holders holding a large supply of the coin will further reduce the number of BTC in supply. This holding culture creates a vicious cycle as a shortage in supply reduces future prospects for small and newer holders.

It’s believed that these holdings can also serve as a hedge against government regulations. Government cannot freeze BTC holdings. This gives companies peace of mind against regulatory agencies and their prying eyes.

As BTC market cap moved to surpass Tesla’s market cap, it gained the ninth position on the table of tradable assets. With the current bull run, buying Bitcoin may no longer be considered a bold move. It will be considered industry standard.

The 3% invested in Bitcoin represents $300 billion, which is about a third of Bitcoin’s aggregate value in liquid cash.

It’s more interesting to note that 60% of the Bitcoin supply hasn’t moved in more than a year. This $300 billion inflow is nearly unimaginable for an asset with a $355 billion free float.

Miners are expected to mine 341,640 annually, a mere $16.3 billion. This may mean that in the near future, the price of Bitcoin may more than double if this holding trend continues. It may also create an extreme shortage of supply for people who might be interested in getting into the market at a later time.

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Published under: Bitcoin, Forecasts

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