By
Godfrey Benjamin
April 29th, 2024
This surge in direct demand from financial institutions on the miners has created a spike in the volume of shortage of Bitcoin on centralized exchanges.
Asher Genoot, the CEO of Hut 8, a prominent publicly traded Bitcoin mining company based in the US has revealed that several major banks have approached the firm to purchase Bitcoin directly from the miner. Speaking in an interview with DL News, his company has been contacted by several big banks. The banks’ recourse to Hut 8 for Bitcoin was a result of supply shortages which have been observed on various exchanges.
US Banks Demanding for Bitcoin
Approaching Hut 8 comes as a natural path as the company is one of the key Bitcoin miners in the industry. Speaking at the interview, Genoot noted that the team has “had banks reach out to us to try to buy our Bitcoin because of the supply shortages on these different exchanges.”
This he maintains has placed a strain on the availability of Bitcoin within traditional trading platforms in the crypto community.
Although Genoot was not forthcoming with the specific banks involved, he hinted that they are among the largest institutions in the financial sector.
Given that Hut 8’s holdings place it among the top players in the cryptocurrency space with BTC holdings, with its HODLed coins surpassed only by industry giants such as software developer MicroStrategy Incorporated (NASDAQ: MSTR), rival mining company Marathon Digital, and electric car manufacturer Tesla Inc (NASDAQ: TSLA), it is not surprising that such financial powerhouses are approaching them for direct access to Bitcoin.
Possible Impact on Bitcoin Price
Meanwhile, industry watchers have attributed this accumulation spree to the substantial influx of funds into the cryptocurrency market.
There have been over 211,000 Bitcoin, which is approximately $12 billion, accumulated by investors since the approval of a spot Bitcoin ETF in January. The increased demand highlights the growing appeal of Bitcoin as a coveted asset class among institutional investors.
As the Bitcoin halving event approaches later this April, analysts anticipate a further reduction in supply, with block rewards expected to decrease from 6.25 BTC to 3.125 BTC. This will effectively reduce the daily Bitcoin emissions rate from 900 BTC to 450 BTC. This 50% drop will further amplify the Bitcoin supply crunch and possibly drive up prices to new peaks soon.
Stakeholders and investors alike will in the coming days assess their positions as dwindling supply and heightened institutional interest converge on the demand for Bitcoin. This reducing supply stands as one of the key catalysts highlighted by market veterans like Cathie Wood who believe the price of the coin can jump as high as $1.5 million in the near future.
For reference, the price of the coin is currently pegged at $67,375.35, up by 2.24% in the past 24 hours per data from CoinMarketCap.