Bitcoin recently reached an all-time high of just over $73,000, marking a new trend for 2024 in the current market cycle. Currently, the coin’s price is back to around $66,000, but the hot bull market and expectations for further gains in the near future are still causing ripple effects in the market.
One recent effect of this trend has come 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 you can’t find enough coins to buy.
Shortage of supply on exchanges
Exchanges are probably the most popular places for investors to quickly buy and sell coins, as well as trade and convert coins into other cryptocurrencies. So one would expect the big banks to go there and rake in as much money as they want. Exchanges that offer P2P functionality are ideal for this purpose.
However, there are not enough Bitcoins to buy on exchanges, and it can be said that there is a shortage of supply. However, this does not mean that Bitcoin holders will not remain on exchanges. Maybe the holders don’t want to sell even at the current high price. This has forced banks to contact Bitcoin miners to buy directly from them. Still, there are some cases where miners don’t want to sell.
How will this affect the Bitcoin market?
It is a common expectation that a decrease in supply will lead to an increase in demand, which will affect prices. Continued shortages could cause a “supply shock,” which could push prices higher as banks and other investors scramble to fill their bags.
Another aspect that could significantly contribute to this situation is the upcoming Bitcoin halving event, which will cut the supply in half.
