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Institutional investors buy BTCs like crazy after halving

Both data and first-hand accounts from industry experts indicate that interest in Bitcoin (BTC) from institutional investors is accelerating at a rapid pace. This has led some to conclude that the „perfect storm“ is about to hit the market.

GBTC BTC Holding & Assets Under Management. Source: Cointelegraph, Grayscale.

GBTC Holding & Assets Under Management. Source: Cointelegraph, Grayscale.

Price is not a factor

The Grayscale Bitcoin Trust, or GBTC, a publicly traded vehicle backed by

  1. Bitcoin Billionaire
  2. Bitcoin Profit
  3. Bitcoin Evolution
  4. Immediate Edge
  5. Bitcoin Circuit
  6. Bitcoin Era
  7. Bitcoin Revolution
  8. Bitcoin Code
  9. The News Spy
  10. Bitcoin Trader

has grown steadily in size over the past few years. However, in recent months, its growth has begun to accelerate. Interestingly, the fluctuation in the price of the underlying asset doesn’t seem to affect this growth pattern. This makes sense, considering that investors have a minimum lock-in period of six months.

Bitcoin hashrate falls by 30% which experts say is a bullish sign
Daily Change in GBTC BTC Holdings & BTC Price Change. Source: Cointelegraph, Grayscale.

Daily Change in GBTC BTC Holdings & BTC Price Change. Source: Cointelegraph, Grayscale: Cointelegraph, Grayscale.

Grayscale can grab 550k BTC for 2021

What makes GBTC an important driver of market dynamics is not only the fact that, according to its spokesperson, more than 90% of entries come from institutional players:

„From the beginning, 90% of the inflows to our family of products come from institutional investors.“

But also, their holdings diminish Bitcoin’s current supply, as their assets are locked away in Coinbase’s vaults. To date, GBTC has taken 350,000 BTC out of the circulating supply. This represents 2% of Bitcoin’s current supply, regardless of the amount of coins lost.

Grayscale’s Bitcoin holdings are over $3 billion, growing 76% year over yearDaily BTC Issuance & GBTC Consumption. Source: Cointelegraph, Grayscale.
Daily BTC Issuance & GBTC Consumption. Source: Cointelegraph, Grayscale.

Since 2019, GBTC has consumed 100,375.93 BTC, which is 17% of all Bitcoins mined during this time period.

In the last three months, the pace at which institutional investors have been investing in GBTC has tripled. If this trend continues, in another three months, it will maintain 400,000 BTCs, and in another 6.5 months after that, March 2021, it will accumulate around 550,000 BTCs or 3% of total supply.

In addition, if this forecast holds true, it will mean that GBTC will account for 75% of all newly mined Bitcoins during this time period.

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