BlackRock Drains 13 Days’ BTC Worth, Triggering Supply Crunch Worries

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BlackRock Drains 13 Days’ BTC Worth, Triggering Supply Crunch Worries
  • BlackRock absorbs 11,500 BTC in 2 days, which is equivalent to 13 days of Bitcoin production.
  • Concerns arise over a supply crunch as ETFs’ needs outpace daily production.
  • Nonetheless, market participants see the situation as a bullish signal.

In a recent post on X, pro-Bitcoin advocate “InvestAnswers” unveiled a startling revelation about BlackRock’s substantial Bitcoin acquisitions, sparking concerns of a looming supply crunch.

According to the post, BlackRock, one of the world’s largest asset management firms, absorbed a staggering 11,500 BTC from the market in just two days. Given that approximately 900 BTCs are issued daily, BlackRock’s accumulation represents a significant chunk of the daily supply. 

Specifically, the tweet highlighted that the 11,500 BTC withdrawal accounts for about 13 days’ worth of Bitcoin production. Notably, the BlackRock figure amounts to approximately $500 million at Bitcoin’s market value.

Moreover, the data suggested that BlackRock’s spot ETF only captured an average of 25% of the overall volume of Bitcoin ETFs over the same two-day period. When factoring in this information, it is estimated that 46,000 BTC was removed from the market within the specified timeframe.

Extrapolating the figures, assuming a daily withdrawal rate of 23,000 BTC, the pace of accumulation by U.S. ETFs alone would be 25.56 times the daily production. Besides, retail investors, other global ETFs, and market participants also have a need to stock BTC. Essentially, the Bitcoin analyst argued that the market could be heading towards a severe supply crunch if the trend of BTC accumulation through ETFs persists. 

Meanwhile, he concluded his commentary on a bullish note, urging crypto market participants to ignore temporary price fluctuations. He believes the projected supply crunch could be pivotal in sending Bitcoin’s market to new astronomical price limits.

On the other hand, a commenter highlighted the tendency of BlackRock and institutions to engage in over-the-counter (OTC) trading, often referred to as the black pool, as a strategic move to mitigate market volatility. 

The X user cited that Coinbase, one of the custodial platforms for the Bitcoin ETF issuers, reportedly holds a substantial $7 billion worth of Bitcoin in the OTC market. This comment likely suggests that the impact of the continuous accumulation of Bitcoin may not be immediately apparent.

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