In brief
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Bitcoin’s price is exploding as companies continue to buy the asset in large quantities.
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There could be a widespread bitcoin shortage soon, according to Pantera Capital.
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The asset will continue to be available, but the bitcoin landscape might be different.
Chaos in the US political landscape has forced the Federal Reserve to turn the printers into overdrive, pushing asset prices into outer space, according to a publication by blockchain investment fund, Pantera Capital.
One such asset is bitcoin, and its price is about to blast through the roof due to tech companies hoarding the cryptocurrency.
“PayPal and Cash App are already buying more than 100% of all newly-issued bitcoins,” the post said. “When other, larger financial institutions follow their lead, the supply scarcity will become even more imbalanced. The only way supply and demand equilibrates is at a higher price.”
With big tech swallowing the bitcoin supply whole, this could place increased pressure for bitcoin’s price to continue surging. At the same time however, it will restrict access for everyday people who might not have $20,000 laying around to purchase bitcoin.
Thankfully, there’s no need to worry just yet, according to Pantera Capital.
Read More: Bitcoin is now the world’s largest bank.
Speaking to Decrypt, Pedro Febrero, Co-Founder of the academy Crypto Nerds, and analyst at Quantum Economics said that the number of Bitcoin getting “concentrated in fewer hands in the long-term” could be a “problem for the democratization of finance.”
He added though that bitcoin’s supply is limited, and eventually big companies will sell it at some point or another. “Finally, we shouldn’t forget that not all Bitcoin is simply being ‘hodled’,” he said.
Research from analytics firm Chainalysis last week showed that the amount of bitcoin available for circulation depends on whether those holding the coin want to sell or trade it.
About 77% of all 14.8 million mined bitcoin are stored in ‘illiquid’ wallets i.e. wallets that are not sending bitcoin back and forth. This shows that massive buyers have bought the asset and stored it safely – keeping it as a store of value.
This is not necessarily a bad thing.
After all, big tech and large institutional investors purchasing the asset help to legitimise and secure the network. Since every bitcoin holder is defacto incentivised to maintain the network, more nodes and hashing power quickly follow suit. Eventually, even governments might help to secure the bitcoin network.
Bitcoin is an asset that nobody on earth has the power to deflate. It is a form of decomoratisation of money and some have posited that bitcoin could also lead to ending global war.
Either way, there’s no need to worry about the currency ever disappearing: with companies like PayPal buying it up, it’s now easier to buy the crypto than ever before.
As Pantera Capital said in the post: “Previously the friction to buy bitcoin was pretty onerous: take a selfie with your passport, wait days to a week to get activated, daily limits.”
“Three hundred million people just got instant access to Bitcoin, Ethereum, and other cryptocurrencies.”
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