Bitcoin is a verifiable and scarce asset: there are only 21 million “coins”, 19.6 million of which have already been found. However, there are significantly fewer in circulation: investors can only buy 2.3 million BTC on crypto exchanges. The rest is in the hands of iron-hard hodlers – or is even lost forever.
The available BTC can possibly be divided among private investors and some large investors such as MicroStrategy. However, if you add institutional interest to the equation, you realize: the demand is enormous, the supply is low. The upcoming Bitcoin Halving could make this situation even worse – a catalyst for future price growth. So should you still buy Bitcoin now? And how long will stocks last?
Bitcoin supply is becoming scarce: This is how many BTC there are on exchanges
On average, ETF sponsors withdraw 3,000 BTC from the market per day. That’s around $200 million, like Data from Farside prove. Additional demand pressure comes from Hong Kong. Four Bitcoin spot ETFs could be approved there as early as mid-April, which, according to industry expert Adrian Wang, CEO of Metalpha, will bring new capital with them.
BlackRock and Co. do not go on a shopping spree on conventional crypto exchanges, but rather purchase BTC “over the counter”. Such OTC purchases are commonplace in the financial world. In order not to influence the price, institutional investors usually buy large quantities of an asset over the counter. But the fact is: there is also excess demand on OTC desks from time to time.
It remains to be seen whether the financial giants will actually be forced to buy Bitcoin on regular crypto exchanges at some point. But here too there has been a BTC shortage for months: there are currently only 2.3 million Bitcoin on the exchanges, according to data from Glassnode show.
In percentage terms, only 11.6 percent of all Bitcoin is still on crypto exchanges, the lowest number since April 2018.
Will there soon be no more Bitcoin on exchanges?
It will probably not happen that stock exchanges suddenly find themselves empty-handed in front of investors who are thinking about investing in Bitcoin. Nevertheless: More than 15 million BTC are lying dormant on cold wallets and are illiquid. This means: Many Bitcoin holders are not yet ready to sell their BTC at a price of around $70,650 (April 12, 2024, 9:45 a.m.).
Only when prices are higher – possibly at $100,000 or even higher – will some investors be likely to sell their BTC holdings. This would mean that there would be more BTC on the exchanges again and the supply would become larger. The difference for investors who then buy Bitcoin: the price.
Price forecast: Buy Bitcoin now?
Given the price forecasts for the next few years – everything from 100,000 to 500,000 US dollars is included – a Bitcoin investment seems sensible. At least in the long term, because: While Bitcoiners are looking forward to the halving, an expert is warning of a price correction. BitMEX founder Arthur Hayes believes a short-term crash is likely. You can read how the Bitcoin price could develop after the halving here: What happens to the Bitcoin price after the halving?
What is important for investors: the investment horizon and personal risk assessment. After all, experts and those who want to be experts can predict a lot when the day is long. The decision at which price investors buy Bitcoin is up to each individual anyway. It is not for nothing that the scene says: “Everyone gets the price they deserve.”
Disclaimer: This article is for informational purposes only and does not constitute a purchase, sale or action recommendation.
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