Bitcoin has stagnated over recent weeks and months after peaking at $12,500 in August. The leading cryptocurrency currently trades at $11,450, stuck in the middle of the range between $10,000 and $12,500. Throughout this, institutions have increased their exposure to Bitcoin en-masse, with tens of thousands of coins being accumulated.
A prominent macro thinker and gold bull thinks that this may mean that there may soon be a Bitcoin “shortage.” This shortage will likely drive prices higher as demand for BTC outweighs the market supply, which is only compounded by the May 2020 halving.
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Expect a Bitcoin Shortage?
Over recent months, it’s been clear that institutions have increased their exposure to Bitcoin at a rapid clip.
Just recently, Stone Ridge Asset Management announced that it had picked up 10,000 Bitcoin. The $10 billion asset manager explained that it sees the cryptocurrency as a crucial investment in the shift towards open monetary systems. It was added that the COVID-19 pandemic and the subsequent macroeconomic fallout showed them that the traditional way of constructing portfolios may be flawed.
Dan Tapiero, the co-founder of Gold Bullion International amongst other companies, thinks that shortages of Bitcoin are possible as the cryptocurrency is accumulated en-masse:
“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.”
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
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Not the Only One That Thinks So
As unlikely as a Bitcoin “shortage” sounds, other individuals think that it may take place.
Pseudonymous cryptocurrency trader “Light” recently said that Bitcoin is in the midst of a “sell-side liquidity crisis” as retail and institutional investors accumulate the coin en-masse:
“Bitcoin is experiencing the beginnings of a sell-side liquidity crisis. It has always been like oil on crack. Production is entirely inelastic, demand meanwhile, is reflexive.”
It is yet unclear when an inflection point will be reached where supply won’t be able to meet demand.
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Photo by Katie Harp on Unsplash Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com There May Soon Be a Bitcoin "Shortage" Amid Institutional Adoption