On this group we’ve seen a whole raft of corporations buy large amounts of bitcoin: Tesla and Square are well known but there are dozens of financial institutions too. As a result, the number of bitcoins in circulation is actually decreasing each month over the last year:
“institutions are buying up more bitcoin per month than the ones that are being mined, and there just isn’t enough for everybody.”
[the] pattern suggests that the ever-decreasing supply of bitcoin available to buy and sell might lead to a price surge as more institutional investors embrace the largest cryptocurrency as an investment.
– More Institutional Investors Jumping Into Bitcoin Leaves Less to Go Around, Data Shows
The article also notes a few factors:
- ~ One, that institutions will only buy from exchanges that are ‘clean’ ie who perform enough due diligence on customers that the crypto is unlikely to be from theft or ransom or money laundering. That puts pressure on such exchanges.
- ~ Two, that ‘retail’ investors – people like you and me – now have more avenues than ever to buy and sell bitcoin via Square, Paypal, Robinhood and a number of such apps. That increases the demand for ‘in circulation’ bitcoin
- ~ Finally, that unlike fiat currency, no one can just print bitcoin. There’s a pre-set rate at which new coins are – and will be – mined. That puts even more pressure from the supply side!