Bitcoin supply squeeze heats up as Grayscale buys nearly 3x the BTC mined in December

Institutional crypto funding big Grayscale now has $20 billion beneath its management as its Bitcoin (BTC) buys outstrip manufacturing by virtually three to 1.

As famous by information evaluation useful resource Coin98 Analytics on Jan. 1, Grayscale purchased virtually thrice extra BTC than that which was added to the market in December 2020.

It is official: Miners cannot produce sufficient Bitcoin

Final month, the corporate added a complete of 72,950 BTC ($2.132 billion) to its property beneath administration (AUM). Throughout the identical interval, miners generated simply 28,112 BTC ($821.7 million) — 38.5% of Grayscale’s buy-in.

The figures underscore what many have described as an ongoing liquidity squeeze in Bitcoin, the place massive consumers suck up any out there provide and take away it from circulation, sending it to chilly storage for long-term hodling.

As Cointelegraph reported, the phenomenon was already seen in November, however December noticed a transparent improve in demand from Grayscale and different institutional entities.

BTC mined vs. purchased by Grayscale in December 2020. Supply: Coin98 Analytics/ Twitter

Grayscale now controls $20 billion in crypto

Because the clock chimed midnight on New 12 months’s Eve, in the meantime, Grayscale CEO Barry Silbert celebrated bringing the corporate’s complete AUM throughout its numerous crypto funds to over $20 billion. Only one 12 months in the past, the determine stood at a mere $2 billion.

Grayscale crypto property beneath administration as of Dec. 31, 2020. Supply: Grayscale/ Twitter

The corporate stays the biggest institutional participant on the Bitcoin scene, with its $17.475 billion in BTC far outstripping some other market participant. Newcomer MicroStrategy, whereas not an funding enterprise, now controls 70,470 BTC ($2.06 billion).

Going ahead, analysts predict that extra demand for the fastened provide of “new” bitcoins from miners will solely serve to create a bidding warfare and push up the value. Sellers already confronted stiff resolve from consumers in December, when new all-time highs failed to supply important long-lasting pullbacks.