Recently, Bitcoin reached a new all-time high just above the $73k mark, marking a new 2024 trend in the current market cycle. Although the coin’s price has now pulled back to around $66k, the hot bull run and expectations of a further upswing in the near future are still causing ripple effects in the market.
One of the latest effects of this trend has manifested in the form of increased buying pressure among investors. Big banks are now more interested in acquiring Bitcoin than ever before. The problem is that they can’t find enough coins to buy.
Supply Shortages On Exchanges
Exchanges are perhaps the most popular places where investors buy and sell their coins quickly, as well as trade and convert them into other cryptos. As such, one would expect the big banks to head over there and scoop up as much as they want. Exchanges that offer P2P facilities are great for this purpose.
However, there isn’t enough Bitcoin to be bought on exchanges, which can be called a supply shortage. That’s not to say that no Bitcoin holders are left on exchanges. It could be that the holders are unwilling to sell even at the current high prices. This has forced the banks to contact Bitcoin miners to buy directly from them. Still, there have been some cases where the miners also don’t want to sell.
How Does This Affect The Bitcoin Market?
It’s a common expectation that a decrease in supply leads to increased demand and affects the price. Continued supply shortage could result in a “supply shock” that could increase prices as banks and other investors clamour to fill their bags.
Another aspect that could significantly contribute to this situation is the upcoming Bitcoin halving event, which will cut the supply by half.
