How Institutional Bitcoin adopters hold up about 3% BTC in circulation

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The rising appetite of institutional investors means that companies now hold more than 460 000 BTCs, which is 3% of the total supply in circulation.

Institutional investors are increasingly turning up Bitcoin, and at the time of writing, almost 3% of the Bitcoin (BTC) in circulation were tied up in long-term holdings by these investors.

Data reveals that 24 organisations have acquired more than 460,500 BTCs, which is equal to $22 billion at Bitcoin’s current price.

According to Michael Novogratz, this figure excludes the 3 million BTC forever lost, who estimates that a supply shortage could occur shortly if institutions keep up their current buying spree.

The latest list of investors includes MtGox K K K, which is equivalent to 141,690 BTC ($6.6 billion). Next is Block.one with an estimated $140,000 BTC of $6.5 billion). MicroStrategy already has about 71,000 BTCs ($3.3 billion) and this week Tesla has purchased 38,500 BTCs (about $1.8 billion).

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Analysts are now predicting that keeping Bitcoin in treasury will soon become a corporate practise as there are several technological reasons for seeing Bitcoin as an inflation hedge.

Second, BTC has a limited supply in circulation, mimicking the gold store of value usage. In addition, there is no way to accelerate the new supply of Bitcoin by additional mining.

Large holders further minimise the circulating supply by purchasing large quantities from the market and storing them in cold storage. This long-term culture keeping among the majority of the crypto participants decreases the already limited supply, creating a vicious cycle.

For savvy Chief Financial Officers, holding a portion of Bitcoin’s treasury offers some regulatory hedge and arbitration as regulators cannot freeze the funds.

What is interesting about Tesla’s decision to buy Bitcoin is the timing, as the decision came after the BTC price rose 250 percent in four months.

 

Companies, cryptos, and metals rank. Source: 8marketcap.com

This week’s change caused BTC’s market capitalisation to exceed Tesla’s, reaching ninth place among all tradable assets.

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In the past, buying bitcoin may have been seen as an extremely bold move, but now it’s becoming common sense for institutional investors.

With an estimated $10 trillion in corporate treasury worldwide, even a 3% allocation to BTC represents $300 billion, which is around a third of Bitcoin’s overall value in liquid cash.

Considering that more than 60 percent of the Bitcoin supply hasn’t shifted in more than a year, a $300 billion inflow is almost unprecedented for a $355 billion free float asset.

In addition, the newly mined BTC adds up to 341,640 a year, a mere 16.3 billion dollars. It is therefore fair to assume that the steady allocation of BTC to corporate treasuries will more than double the current price of Bitcoin.

 

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