Should BlackRock persist with its daily purchases of 6,000 bitcoins, we may face a situation of limited supply in a year and a half, and this is the rationale behind it. If BlackRock continues 6k BTC daily buys we get a supply crunch within 18 months, here’s why
Expanding upon CryptoSlate’s latest evaluation of the contrasting Bitcoin movement into and out of BlackRock and Grayscale, I have further analyzed the data to determine the duration that BlackRock can maintain its present rate of Bitcoin acquisition. On a broader scale, BlackRock’s engagement with Bitcoin via ETFs marks a significant milestone for the acceptance of Bitcoin within the U.S. financial landscape. In addition to the other nine recently launched ETFs, BlackRock’s support is expected to reduce the available and readily available amounts as an increasing number of investors start to view Bitcoin as an option for long-term investment. Additionally, it will boost the trust of investors who are not well-acquainted with blockchain technology and strengthen the reputation of Bitcoin as a legitimate investment category, which in turn could influence its market liquidity and fluctuation tendencies. Before proceeding, I must stress the importance of making a specific point clear through a disclaimer. The following analysis provides a speculative examination of potential accumulation figures that might result from spot Bitcoin ETFs. I have employed the initial funds received by BlackRock as the benchmark. It’s uncertain whether these conditions will continue, and should they remain, it would probably lead to a higher cost for Bitcoin. It is unrealistic to assume that the desire for Bitcoin will stay constant at a specific price, making it highly unlikely that the same volume of Bitcoin will continue to be purchased over an extended timeframe. However, examining the statistics from a hypothetical perspective does bring to light some notable figures that, when combined with additional analyses, may indicate the potential approach of a Bitcoin shortage. As these new ETFs persist in their high-rate acquisition of Bitcoin, the situation improves for those who hold onto their Bitcoin for the long term, including enthusiasts known for their ‘laser eye’ profile pictures. In my view, holding onto Bitcoin makes more sense now than ever before. As the amount of Bitcoins that can be bought through Exchange-Traded Funds (ETFs) diminishes, we approach a scenario known as MOASS (Mother Of All Supply Squeezes), in which the price of Bitcoin skyrockets. This would not be due to short-sellers being forced to purchase Bitcoin to cover their positions, but rather because institutional buyers would need to acquire Bitcoin on the open market just like everyone else. Regarding Bitcoin liquidity and the immediate influence of BlackRock, since the launch of the first spot Bitcoin ETFs in the United States last week, BlackRock has been purchasing an average of 6,266 BTC per day, adding up to a total of 25,067 BTC as of the latest information available.