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- On-chain data reports that the market is running low on the supply of the world’s largest cryptocurrency, hence causing a direct increase in its price
- Bitcoin has been striking historical record highs, with its recent value reaching $41,750 in December 2020
- The rally has initiated a new wave with renowned institutional investors as well as firms have started taking the asset seriously
The demand for Bitcoin multiplied last year. In contrast, On-chain data reports that the asset’s limited supply is the reason behind the increasing rush.
The FOMO league with Bitcoin
The world’s largest cryptocurrency witnessed a rise in its demand last year. The surge is significant despite the stark economic outlook, ceaseless money printing, exhausted fiat currencies, and low outputs in conventional assets.
The rally observed renowned institutional investors as well as firms sit up and take the asset seriously. This transition happened due to the asset’s crossover of its earlier all-time high of $19,800. The value, subsequently, was unstoppable as it reached $41,750 in December 2020.
Some of these players involved multi-billion funds like Guggenheim Partners, which registered its interest in BTC with the US Securities and Exchange Commission (SEC) last year.
Meanwhile, others picked the plunge-route. Paul Tudor Jones, principal of Tudor Investments, invested almost 2% of his capital into the asset class. He stated that though the asset was significant speculation, it also remarked the “fastest horse” amongst other crypto market assets.
The FOMO train did not spare technology firms as well. Fintech service Square, owned by Twitter founder Jack Dorsey, put around $50 million of its treasury funds into BTC. It proclaimed BTC as an instrument that would lead to economic empowerment and provision for the world to engage with the global monetary system.
MicroStrategy’s chad-like Bitcoin investment was still not blocked by any of this. The firm had established a position worth a billion in the asset, beginning in August 2020. Recently, it made its most significant investment in December when it utilized the proceeds from raising $650 million in a convertible note to purchase more Bitcoin.
On-chain data reports
The institutional interest in Bitcoin is just beginning to develop. Willy Woo, an On-chain analyst, tweeted today that the “whale spawning” season has arrived. He made this statement in the context of the huge Bitcoin transactions happening around.
He added that this squeeze of sell-side liquidity is the reason behind the record high Bitcoin investments in the last month. This further surged the price of the crypto asset to above $23,000 and beyond.
Meanwhile, he also proclaimed that the data’s supply was 4.1 million “liquid” coins. What remains interesting is that this supply has been consistently dropping amid the stimulus rounds and money printing. An observation has suggested that the market is running low on sellers currently.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
