The advent of U.S. Spot Bitcoin ETFs has set off a frenzy among Wall Street players, signaling their increasing confidence in the flagship crypto, Bitcoin. However, this surge in institutional interest has raised concerns about a potential BTC supply crunch. Amid this, major Wall Street banks are now vying to directly purchase Bitcoin from mining companies, seeking to bolster their reserves amid growing scarcity.
Wall Street Banks Accumulating Bitcoin From Miners
The launch of U.S. Spot Bitcoin ETFs on January 11 has witnessed staggering success, with over $12 billion in inflows recorded since then. Notably, the optimism over the U.S. Spot Bitcoin ETF success has also fuelled positive sentiment in the market, sending Bitcoin price to its all-time high of nearly $73,000 recently.
However, this rapid uptake has led to a shortage of Bitcoin on centralized exchanges, compelling Wall Street banks to explore alternative avenues for acquisition. Notably, companies like Hut 8, a prominent BTC mining firm, have been approached by these Wall Street players, eager to bolster their Bitcoin holdings, according to a report by DL News.
Meanwhile, the report added Hut 8 CEO Asher Genoot’s statement, which revealed that the mining firm has received direct inquiries from major Wall Street banks looking to purchase Bitcoin directly from them. In addition, he emphasized Wall Street’s interest not only in Hut 8’s existing BTC reserves, which amount to nearly $600 million but also in its production capabilities.
Notably, these banks, according to Genoot, encompass some of the largest financial institutions globally, the report added.
Also Read: Bitcoin Short-Term Investors Lose $5.2B Amid BTC Price Crash
Implications of Halving on Supply
Amid the soaring competition between the Wall Street banks, the impending Bitcoin halving, scheduled for April 19, adds another layer of complexity to the supply dynamics. This network upgrade will reduce the rate of new Bitcoin creation by half, from about 900 BTC to 450 Bitcoin per day.
Meanwhile, Genoot highlighted the significance of this event, suggesting that it could further intensify the existing BTC supply shortage issues. With demand for BTC on the rise and a diminished supply on the horizon, the stage is set for further price appreciation in the cryptocurrency market.
“It’s a double whammy in terms of pushing Bitcoin’s price up,” Genoot remarked, underscoring the potential impact of reduced supply alongside heightened demand. As Wall Street banks scramble to secure BTC from miners, the cryptocurrency landscape continues to evolve, presenting both challenges and opportunities for investors and industry stakeholders alike.
A flurry of Wall Street players have increased their bets on the flagship crypto, Bitcoin. For instance, MicroStrategy, under CEO Michael Saylor’s leadership, strengthens its BTC investment with the recent acquisition of 9,245 BTC. This move bolsters its status as a significant holder of the cryptocurrency.
With over 214,000 BTC in its portfolio, MicroStrategy now holds about 1% of the total Bitcoin supply, reflecting the shifting Wall Street focus towards the digital asset sector.
Also Read: Bitcoin Cash Price Up 10% After Halving, Bitcoin Halving Hype Grows
The post Wall Street Banks Rush To Buy Bitcoin From Crypto Miners Amid Supply Woes appeared first on CoinGape.
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