The Bitcoin Market Is Entering a Critical Phase, and Institutions Are the Main Players

Approximately 164,000 Bitcoins are issued each year, and almost all are directly acquired by financial institutions. This growing institutional demand vastly exceeds the available supply.

The Bitcoin market is entering a critical phase, and institutions are the main players. Indeed, the large financial institutions are now absorbing almost all newly issued BTC. This discreet but massive strategy could soon disrupt market balance, even causing a shortage of available Bitcoin.

Institutions capture the majority of new Bitcoins

Approximately 164,000 Bitcoins are issued each year, and almost all are directly acquired by financial institutions. This growing institutional demand vastly exceeds the available supply. Thus, it creates a situation where BTC accumulation by these major players dominates the market. However, the demand from other major buyers, like governments and ETFs, is not even taken into account yet.

This constant pressure exerted by institutions on the market only reinforces the fears of an imminent imbalance. With a fixed annual production and a limited amount of BTC in circulation, the current dynamic could quickly transform into a supply crisis. To date, only 19.75 million Bitcoins have been mined, and according to estimates, between 3 to 4 million are irretrievably lost, further reducing the actually accessible volume.

A liquidity crisis on the horizon !

The threat of a supply shortage is not just about a simple reduction in Bitcoin availability. Indeed, the frantic accumulation by institutions could have direct consequences on the liquidity of crypto markets. Such a scenario could push Bitcoin prices up but also restrict the ability of individuals and small businesses to acquire the crypto. The scarcity induced by this institutional concentration would quickly unbalance trades, with rising prices and increased volatility risks.

Moreover, this situation could affect the entire crypto market. If Bitcoin becomes an increasingly rare resource, traders might turn to altcoins.

The Bitcoin market is at a decisive stage. This race for institutional purchases could, in the short term, benefit major investors with record prices. However, this same dynamic risks creating profound distortions in liquidity and trading stability.

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