Macroanalyst Discusses "Bitcoin Deficit" Amid Soaring Institutional Demand

A key factor for bitcoin as an investment is its scarcity.supply and emission limitation 21million coins, most of the value of the main cryptocurrency is formed due to the scarcity. Models generated by analysts - such as the one from PlanB - only confirm the validity of this assumption. Macroinvestor Dan Tapiero believes that this deficit will only increase in the future, and very soon.

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. pic.twitter.com/4S4TrLNH8J

— Dan Tapiero (@DTAPCAP) October 14, 2020

Dan Tapiero:

Serious Bitcoin shortage is possible.

Barry Silbert's Grayscale Trust is buying up bitcoin like the last time.

If 77% of all mined bitcoins turn into110%, it will just be "mascara light". Non-mining supply during the growth will be held out of the markets, short positions will be destroyed, the price can skyrocket to almost any value.

Co-founder of Gold Bullion International noted,that the latest data released by Grayscale Investments suggests that this firm has accumulated 77% of all bitcoins mined in the third quarter of 2020.

Grayscale Investments is a management companyspecializing in digital assets, which, on behalf of its institutional clients, has accumulated more than two percent of all bitcoins issued to date. In the third quarter alone, the firm purchased $ 720 million worth of bitcoins for its clients.

Tapiero believes that the fact that one company accumulates so many bitcoins can significantly increase the scarcity of the main cryptocurrency.

The idea is that miners naturallysell their coins to cover expenses. If institutional buyers outweigh this natural selling pressure enough, then the bitcoin price will rise further. The price of any asset is a function of supply and demand: when one outweighs the other, it leads to price movement.

Tapiero is not the only analyst who believes that institutional money will skyrocket the price of bitcoin in the coming years.

Former head of the Goldman Sachs hedge fund department Raoul Pal claims that the price of the main cryptocurrency will reach $ 1 million in the next five years.

“Only from what I know personally from everyoneorganizations, all the people I've talked to about this, a huge wall of money is coming into Bitcoin right now. Previously, the channels they used simply did not allow this, but now this huge wall of money is already very close. Bitcoin is on all radars now and a lot of smart people are purposefully working in this direction. "

And we can already see how this begins to happen. Even without Grayscale, institutional players have accumulated a significant amount of bitcoin over the past few months.

Business services companyMicroStrategy purchased $ 425 million worth of bitcoins in August and September to hedge inflation risks. Shortly thereafter, Stone Ridge Asset Management, which manages the $ 10 billion fund, announced the acquisition of 10,000 bitcoins. And these are just two examples of many others.

Retail investors are also following the lead of institutional

It's worth noting that retail investors also seem to be in the midst of accumulating bitcoin.

Cryptocurrency trader known by his pseudonymZ, said that according to data released by Coinbase, this exchange, which is popular with retail users, has acted as a net buyer of bitcoins in recent weeks.

According to him, Coinbase users forthe previous 44 days had purchased a total of 40,000 bitcoins, averaging around 800 coins per day. Coincidentally, this corresponds to the amount of bitcoins mined daily.

“I looked through some numbers today: Since the fall of BTC from $ 12,000 to $ 10,000 on September 2, Coinbase has generally acted as a major buyer of BTC. The net purchase volume was 40,000 BTC in those 44 days (800 BTC per day). "

At the same time, the total amount of bitcoinsheld on exchange wallets has significantly decreased. This indicates that retail investors are busy accumulating BTC in anticipation of the next phase of growth.

 

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