Bitcoin [BTC] demand is becoming net positive with respect to the daily supply. With more than 87.5% of the total supply already mined, this is indicative of positive effects in price. The report from 100 Acres Investment analyzes the demand across two leading platforms in the U.S. for institutions/accredited investors and retail investors – Grayscale and Square Crypto.
The average quarter-to-quarter growth of BGTC and BTC trading revenue is 7.4% and 37.1%, respectively.
Assumption and Sampling
The report takes into account the trading volume across two platforms only. Moreover, the initial assumption is the fact that all trades are purchases on these platforms. Hence, the data is not conclusive.
Nevertheless, the plain and simple demand across just two platforms reflects a positive trend in the market. Furthermore, the rate of increase in the next progressive quarters is taken to be 15%, which is far less than the present rate.
From the sample of two platforms, the report finds that between June 2020 and by an extremely conservative estimate net demand turns positive in Q1 2021.
See The Big Picture
The report cites that while ‘Bitcoin Halving’ brought a lot of noise and price volatility with itself, it is a superficial event. Since the markets already knew about the implications and the timing of the event, it was always priced in. The report cites,
Setting expectations around Bitcoin price based on previous halvings does not provide appropriate context.
Nevertheless, there is a certain percentage of a drop in the sell-off from miners which is positive for the price as well.
Hanging in plain sight is a strong demand coming from institutions and retail investors. The Grayscale Funds are locked for a period of six months at the time of creation. Hence, the data from Grayscale is more correlated to long-term holding.
This was recently pointed out by independent researcher Kevin Rooke as well. He found that the Grayscale’s Bitcoin Trust bought 18,910 Bitcoins since the halving. Whereas, Only 12,337 Bitcoins have been mined since the halving. Hence, currently, the short term net demand from Grayscale alone eating up the sell-off from miners.
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