With each passing day the Bitcoin market is seeing more and more involvement of the institutional investors. The growing appetite of these companies is bringing BTC into the mainstream setup. Currently, institutions hold approximately 3% of the entire circulating value of BTC.
These companies have locked up their share of Bitcoins in long-term holdings. Current metrics show that investors from 24 companies have acquired $22 billion worth of BTC, which comes to approximately 460,500 Bitcoins.
Recent studies have shown around 3 million BTC has been lost forever. These crypto assets can only be stored in digital wallets. When the value of BTC was negligible, many people had lost their key to their wallets leading to this huge loss of BTC.
Institutional Participants To Impact Bitcoin Market Negatively
Analysts are currently of the opinion that if institutional investors continue with their buying spree, the crypto market might face a severe shortage of the coin. This was first indicated by Michael Novogratz, the CEO and founder of Galaxy Digital.
Apart from this, estimates suggest that Bitcoin is to become an inflation hedge as corporates increasingly make it a standard to store BTC in their treasuries. The list of investors who currently hold positions in the BTC market are, MtGox KK with 141,690 BTC ($6 billion), Block.one with 140,000 BTC (46.5 billion), MicroStrategy with 71,000 BTC ($3.3 billion), and Tesla with 38,500 BTC ($1.8 billion).
Analysts seriously fear the shortage because Bitcoin’s market is similar to that of Gold as it has a finite supply that is in circulation. In addition to that, it is not possible to mine more coins and pump the growth. Therefore, the involvement of the institutional investors with their tendency to lock everything in the cold storage might prove to be vicious for the BTC market. These large investors reduce the circulating supply that is small in the first place and reduce market participation more and more.
