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Grayscale and MicroStrategy, along with other institutions, are hodling Bitcoin even though the coin supply is lower than its demand.
Data on social media recently revealed that institutions are doing a lot more Bitcoin (BTC) hodling. According to several online sources, more than 40% of the king coin’s total supply has not moved wallets in two years.
Tracing the hodling to institutional players, the data also shows that Grayscale (OTC: GBTC) and MicroStrategy (NASDAQ: MSTR) are the two top institutions leading the demand for new coins. These institutions are hodling the assets, and are not selling.
MicroStrategy and GrayScale Acquire More Bitcoin
On the 11th of August, MicroStrategy announced its adoption of Bitcoin as a “primary reserve asset.” In the press release, the largest independent publicly-traded business intelligence company revealed that it had purchased 21,454 BTC at the cost of $250 million.
Referring to the Bitcoin investment as a reserve asset, CEO Michael J.Saylor, said he believes that investment will provide a reasonable hedge against inflation for MicroStrategy. He also added that the BTC investment has a long-term appreciation potential. Following the announcement by MicroStrategy, its shares climbed 9.12%.
“The Great Monetary Inflation is nigh. Arm yourself with Bitcoin.”
Also, an analyst, Kevin Rooke, highlighted the amount of BTC both companies recently bought:
“In the last two weeks… Grayscale added 14,422 BTC to $GBTC, Microstrategy bought 21,454 BTC, Bitcoin miners mined 12,594 BTC.”
Before now, Grayscale bought a lot of Bitcoin over the past few months. On the 19th of July, Grayscale bought 19,879 Bitcoin, after which the company took a short break from purchasing BTC. Now, Grayscale has resumed purchasing more BTC. According to its second-quarter digital asset investment report, the average weekly investment in Grayscale Bitcoin Trust is $57.8 million.
Furthermore, a report by Cointelegraph said that with Grayscale’s possession of a large number of coins, the company is on the move to own over 3% of all BTC by January 2021.
However, despite the large amount of BTC owned by MicroStrategy and Grayscale, the companies are hodling the coins, keeping them from entering the market. Instead, they are buying up new coins. In the past few weeks, the amount of coins miners supplied has not satisfied the companies’ demand. This is due to the fixed number of new coins per block, which dropped 50% at the halving in May.
Investors Have Been Hodling Bitcoin For Years
In a little over a year, the demand in BTC/USD has reached its highest levels. However, holders of the coins are not willing to sell. For about two years, the supply of BTC has been rather low compared to the demand. With this, it appears that a lot of investors have plans to use the acquisition of BTC as a long-term investment strategy.
The digital asset manager of Capriole commented on recent happenings regarding the reduced supply in BTC:
“More than 40% of Bitcoin hasn’t moved in over 2 years. The last time this much supply had built up and was locked in Bitcoin was January 2016. Despite the recent price rises, no one wants to take profits.”
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