The Shrinking Bitcoin Supply on OTC Desks: Implications and Potential Outcomes

The Shrinking Bitcoin Supply on OTC Desks: Implications and Potential Outcomes

The availability of Bitcoin on Over-the-Counter (OTC) desks has seen a sharp decline recently, with reports indicating that at one point, only approximately 40 BTC were available for sale. This development has significant implications for the market and could potentially signal a new era in Bitcoin trading dynamics.

Caitlin Long, the CEO and founder of Custodia Bank, shed light on the current state of the OTC Bitcoin market through a series of posts on X (formerly Twitter). Long highlighted, “The #HODLgang has mostly held…I spent time in NYC over the past couple of days and it’s clear why the Bitcoin price spiked this week: there was almost no BTC available for sale on the big OTC desks.” Samuel Andrew, another prominent figure in the crypto space, chimed in by stating, “OTC desks are nearly dried up. Very little Bitcoin available that’s easily accessible to meet demand. BlackRock and Fidelity are moving size in ways crypto has never seen before.”

A credible source revealed to Long that only roughly 40 BTC were available for sale at any price on a particular day. This scarcity of BTC on OTC desks is not an isolated incident but rather part of a broader trend indicating a significant shift in the market. Glassnode, a leading blockchain data and analytics firm, reported that the amount of Bitcoins held by OTC desks is currently at its lowest level in five years. While Glassnode’s data covers only a portion of the OTC market, it still reflects a clear trend of diminishing BTC availability.

The dwindling supply of Bitcoin on OTC desks implies a potential supply shock in the Bitcoin market. This shock is driven by heightened demand from institutional investors and large corporations seeking to include Bitcoin in their investment portfolios, along with the recent introduction of spot Bitcoin ETFs. Consequently, the shift in price discovery from OTC desks to public exchanges could allow for a more transparent determination of the actual market price of Bitcoin.

Industry analysts are already speculating on the possible outcomes of this situation. Alessandro Ottaviani, a well-known analyst, hinted at the possibility of significant price movements in the near future. He suggested, “After today, good candles (a $10k increase in the daily price), before the halving are possible and realistic.” Francis Pouliot, CEO of Bull Bitcoin, emphasized the self-correcting nature of the market, noting that reputable OTC desks like BULLBITCOIN.COM never run out of Bitcoin.

Adam Back, a seasoned Bitcoin veteran and cypherpunk, exuded optimism about the future price of Bitcoin, stating, “$100k by halving day. People are starting to believe. Bears, leveraged shorts are getting wrecked, scared-off, profit take limit orders are moving upwards or being deleted to wait-and-see; OTC desks are running out of coins, with daily $500m / 10k BTC ETF buy walls. This can lead to rapid upward price gaps with only 51 days to go until Halving.”

The depletion of BTC supply on OTC desks signifies a significant moment for the market. With the forthcoming halving event in April and the heightened institutional interest, the stage is set for potentially unprecedented movements in the Bitcoin market. As of the latest update, BTC was trading at $61,903. Remember that all investments carry risk, and it is recommended to conduct thorough research before making any investment decisions, as the opinions expressed in this article are solely for educational purposes. Use the information provided on this website at your own discretion.


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