Opinion: Bitcoin scarcity is not a bad thing for crypto investors
The price of bitcoin continues to rise, and the bitcoin on the market is continuously being bought by institutions.
On November 21, a "Bitcoin Shortage" report released by Pantera Capital pointed out that now The daily production of Bitcoin simply cannot meet the daily purchases of institutions. "When other larger financial institutions follow their example, the supply shortage will become more unbalanced. The only way for supply and demand to balance is for the price to rise further."< /p>
Because PayPal opened cryptocurrency transactions, its partner itBit traffic surge
Subsequently, according to public information, Rhythm BlockBeats four platforms or channels including Grayscale Investment, Square’s Cash APP, Paypal and 3iQ After summarizing the average daily Bitcoin purchases, it is found that the daily purchase of Bitcoins through these 4 platforms is 5.2 times the daily new output of Bitcoins, and the demand is far greater than the supply (see "Bitcoin now, the demand is 5 times the supply").
Bitcoin’s Price Continues to Rise as Big Tech Enters the Market to ‘Snap Up’ Bitcoin – Does It Make it harder for the average investor who doesn't have millions of dollars to buy into Bitcoin?
Although bitcoin is in short supply, there is no need to worry.
Pedro Febrero, co-founder of Crypto Nerds, an encryption popular science channel on YouTube, and an analyst at Quantum Economics, an encryption analysis company, said in an interview , the amount of Bitcoin has been "concentrated for a long time in the hands of a few people" and may develop into a "financial democratization problem."
Bitcoins will always have a finite supply, he added, and eventually those big companies are bound to sell, "We don't It should be forgotten that not all bitcoins will be “hijacked.”
Last week, blockchain analysis firm According to a study by Chainalysis, the amount of Bitcoin purchased depends on whether people who hold Bitcoin want to sell or trade. Of the 14.8 million bitcoins that have been mined (ignoring those that have been permanently lost), about 77% are stored in illiquid wallets (these wallets are marked by rarely sending bitcoins and only storing them) . This suggests that a lot of big buyers are essentially snapping up assets and watching their value rise.
That's not necessarily a bad thing.
Shawn Dexter, a DeFi analyst at Quantum Economics, expressed his opinion on this, saying, "Big tech companies and institutions hold a lot of Bitcoin will only increase the underlying security of the Bitcoin network and further enhance the storage capacity of value provision."
In addition, he stated that no matter what the price of the currency, "having the option to buy assets is a form of democratization, and no country can unilaterally decide to 'inflate' this asset." People can still use it as a store of value ——Many people are doing the same now.
“Essentially, bitcoin will eventually find an equilibrium, either at extremely high prices or It’s when institutions hold large amounts of bitcoin,” Dexter added. "It doesn't matter because the average person can still store $100,000 worth of bitcoin no matter what its price is."
If things continue like this, the price of Bitcoin may continue to rise. But there's no need to worry about the token disappearing: it's easier than ever to buy bitcoin now, as companies like PayPal continue to provide access.
As Pantera Capital puts it in the report: "Purchasing Bitcoin was quite cumbersome before: you need to hold a passport Identity verification, account activation still needs to wait a few days, and there is still a daily limit.” With the opening of PayPal, 300 million users have instant channels to buy and sell cryptocurrencies such as Bitcoin and Ethereum.
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