The purchase of Bitcoin is becoming more widespread as institutions hold 3% of BTC’s outstanding supply.
The growing appetite of institutional investors means that companies now hold more than 450,000 BTCs, or 3% of the total outstanding supply. Institutional investors are rapidly swallowing up Bitcoin, and at the time of writing nearly 3% of the outstanding Bitcoin (BTC) is locked up in long-term holdings by these investors.
Data shows that 24 entities have amassed more than 460,500 BTCs, equivalent to $22 billion at the current price of Bitcoin.
According to Michael Novogratz, this figure excludes the 3 million BTCs lost forever, who believes that a supply shortage could occur soon if institutions continue their current buying frenzy.
The current list of holders includes MtGox, which has nearly 141690 BTC ($6.6 billion). This is followed by Block.one with an estimated 140000 BTC ($6.5 billion). MicroStrategy also has approximately 71,000 BTC ($3.3 billion) and this week Tesla bought 38,500 BTC (approximately $1.8 billion).
Analysts now expect that holding Bitcoin in the treasury will soon become a corporate standard as there are several technical reasons to consider Bitcoin as an inflation hedge.
Firstly, Bitcoin has a limited supply outstanding, mimicking the value reserve of gold. In addition, there is no way to accelerate the new supply of Bitcoin through additional mining.
The large holders are further reducing outstanding supply by purchasing significant quantities from the market and placing them in cold storage. This long-term holding culture among most cryptographers reduces the already limited supply, creating a vicious circle.
For savvy CFOs, having a portion of Bitcoin’s cash on hand provides regulatory hedging and arbitrage, as governments cannot freeze funds.
What is surprising about Tesla’s decision to buy Bitcoin is the timing, as the decision came after the price of BTC rose 250% in four months.
This week’s move caused BTC’s market capitalization to surpass Tesla’s, reaching ninth position among all tradable assets.
In the past, buying Bitcoin may have been considered an incredibly bold decision, but it now makes sense for institutional investors.
With a rough estimate of $10 trillion in corporate cash worldwide, even a 3% allocation in BTC represents $300 billion, or about one-third of Bitcoin’s total value in cash.
Given that more than 60% of Bitcoin’s supply has been flat for more than a year, an inflow of $300 billion is almost unimaginable for an asset with a float of $355 billion.
Moreover, the newly mined BTC amounts to 341640 per year, or just US$16.3 billion. Therefore, it is prudent to conclude that BTC’s regular allocation to corporate treasuries could more than double the current price of Bitcoin.
By Marcel Pechman, Cointelegraph » article in English
Marcel is a crypto analyst with 17 years of experience as a stock trader for UBS, Deutsche Bank, Pactual and Banco Safra. Brazilian. Marcel holds a post-graduate certificate in Engineering and a Bachelor of Business Administration.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph and Forex Quebec. Every investment and trading move involves risk, so you should do your own research when making a decision.
Interested in crypto-currencies? Coinsquare is Canada’s most secure platform for buying and selling Bitcoin, Litecoin and other digital currencies. « Start Now
Keep your cryptomoney safe!
The Ledger Wallet is the most advanced crypt wallet for storing and using crypto-currencies securely.
To purchase the Ledger Wallet Nano S » Visit the official website
Disclaimer: The information and opinions contained in this report are provided for general information purposes only and do not constitute an offer or solicitation to buy or sell foreign exchange or CFD contracts. Although the information contained herein has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness and assumes no liability for any direct, indirect or consequential damages that may result from reliance on such information.
First Forex Site in Quebec. News, Articles and Analyses of the currency and cryptomony market in French. Our publications should in no way be considered as investment advice.