Institutional investors are devouring Bitcoin fast and at the time of this writing, Almost 3% of Bitcoin (BTC) in circulation is locked into long-term holdings by these investors.
The data shows that 24 entities have accumulated more than 460,500 BTC, which is equivalent to USD 22 billion at the current price of Bitcoin.
According to Michael Novogratz, this figure excludes the 3 million BTC lost forever, who estimates that a supply shortage could occur in the near future if institutions maintain their current buying streak.
The current list of headlines includes MtGox KK, which has about 141,690 BTC ($ 6.6 billion). The next is Block.one with an estimated 140,000 BTC ($ 6.5 billion). MicroStrategy it also has around 71,000 BTC ($ 3.3 billion) and this week Tesla bought 38,500 BTC (about $ 1.8 billion).
Analysts now expect that holding Bitcoin in the treasury will soon become a corporate standard, given that there are multiple technical reasons for view Bitcoin as a hedge against inflation.
First, BTC has a finite supply in circulation, mimicking the use of gold as a store of value. Also, there is no way to accelerate the new supply of Bitcoin through additional mining.
Large holders further reduce the circulating supply by purchasing significant quantities from the market and placing them in offline storage. This culture of long-term holding among most participants in the cryptocurrency sector reduces the already reduced supply, creating a vicious cycle.
For savvy CFOs, having a share of the treasury in Bitcoin provides some regulatory coverage and arbitrage, as governments cannot freeze funds.
What is surprising about Tesla’s decision to buy Bitcoin is the timing, as the decision was made after the price of BTC rose 250% in four months.
This week’s move made BTC’s market capitalization will surpass that of Tesla, reaching the ninth position among all tradable assets.
In the past, buying Bitcoin may have been seen as an incredibly bold move, but today it is becoming common sense for institutional investors.
With a rough estimate of USD 10 trillion of corporate treasury worldwide, even a 3% allocation in BTC represents USD 300 billion, which is roughly one third of the sum of Bitcoin’s equity.
Considering that more than 60% of Bitcoin’s supply has not moved in over a year, a $ 300 billion inflow is almost unimaginable for an asset with a free float of $ 355 billion.
What’s more, BTC freshly mined by miners totals 341,640 a year, just $ 16.3 billion. Therefore, it is safe to conclude that the constant allocation of BTC to corporate treasuries could more than double the current price of Bitcoin.
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