Bitcoin Supply Squeeze? Institutions Absorbing 500% Of New BTC

Data shows institutions are gobbling up Bitcoin supply over five times faster than miners can produce, a sign that has been bullish in the past.

Now, here is the chart shared by the analyst that shows the rate of change in the combined institutional holdings of Bitcoin over the last few years:

As displayed in the above graph, the ROC of institutions’ Bitcoin holdings has witnessed a spike recently, suggesting a surge in accumulation from big-money investors. In the same chart, the ROC data for treasuries and ETFs is also separately shown. From these curves, it would appear that the uptick in the total institutional buying has been a result of surges in both vehicles.

The rise in the ROC of the institutions has been so strong that it has been many times that of the Bitcoin supply itself. Naturally, the ROC of the BTC supply is just the new number of tokens that miners are introducing into circulation via block rewards. This tends to remain quite stable on the network, which is why the metric has a flat line on the chart.

It would seem that such a level of accumulation from institutions has tended to lead to positive price action for the cryptocurrency. “The average return in prior cases is +24% over the next 1 month,” explained the analyst. If the same pattern plays out this time as well, then a similar 24% surge would mean a target of around $97,000.

It now remains to be seen whether institutions will keep up their buying in the coming days or if the current uptick is going to be temporary, like the one from March.

At the time of writing, Bitcoin is trading around $78,700, up 1% over the past week.