OTC Desks Are Rapidly Running Out Of Bitcoin: Caitlin Long

Watch Icon
News
OTC Desks Are Rapidly Running Out Of Bitcoin: Caitlin Long
[[{"value":"

The rapid growth of Bitcoin spot ETFs has dramatically reduced the supply of Bitcoin available through over-the-counter (OTC) desks.

The trend is both visible with blockchain data and was acknowledged by Custodia Bank CEO Caitlin Long on Thursday.

Bitcoin OTC Supply Dries Up

“I spent time in NYC over the past couple of days and it’s clear why the [the] Bitcoin price spiked this week: there was almost no BTC available for sale on the big OTC desks,” Long wrote to X.

Bitcoin is now trading for over $62,000 per coin following a massive February rally—its largest monthly green candle close ever recorded

Many of those gains were driven by seismic inflows to newly launched Bitcoin spot ETFs over the past 50 days, which have already received over $7.4 billion of net inflows during that time.

Bitcoin ETF market makers purchase new BTC “over the counter” or “OTC” – meaning they conduct private purchases with large BTC holders rather than gathering coins directly on the open market.

While this prevents short-term slippage, suppliers must eventually return to public exchanges to source new Bitcoin when demand is overwhelming, ultimately pushing up Bitcoin’s price.

“Only ~40 BTC available for sale at any price at one point on Wednesday, I was told by a credible source,” added Long.

According to Glassnode data, Bitcoin available on OTC desks has declined rapidly since December and is now trending close to zero.

WARNING: The #Bitcoin price is about to go parabolic! There's no OTC Bitcoin available while BlackRock customers are buying half a billion dollars' worth daily… pic.twitter.com/DVFc9KhVKi

— sunnydecree (@sunnydecree) March 1, 2024

That said, on-chain data for OTC Bitcoin isn’t the most reliable, according to some analysts.

“The idea that OTC desks are literally out of supply is comical,” wrote Reflexivity Research co-founder Will Clemente to X on Friday. “Glassnode will be the first to tell you that they only track 3 desks & these wallets are very difficult to track.”

Bitcoin ETF Impact On Price

Although Bitcoin ETFs operate in the OTC market, their timely impact on Bitcoin’s price is highly noticeable. From February 26 to 28, the ETFs absorbed over $500 million of inflows each day, while Bitcoin’s price surged from $52,000 to $64,000.

The following day, Bitcoin’s price stayed flat at around $62,000, while ETFs enjoyed a relatively modest $92 million inflow.

[1/4] Bitcoin ETF Flow – 29th Feb 2024

All data in. $92m of positive flow for the day, with Blackrock and GBTC offsetting eachother, each with $600m flow in the other direction pic.twitter.com/f5uFFxl1YS

— BitMEX Research (@BitMEXResearch) March 1, 2024

The post OTC Desks Are Rapidly Running Out Of Bitcoin: Caitlin Long appeared first on Cryptonews.

"}]] 
More News

Arkansas Residents Outcry Over Rising Cryp...

Watch Icon
Last updated

A senator from the US state of Arkansas is seeking answers from the governor's office as there is an increase in the outcry over unwanted cryptocurrency mines in small towns across the state. Residents of Mountain Pine have complained over “freaking loud” noise from a new crypto-mining facility in Garland County, according to a local news outlet Katv.... Read More: Arkansas Residents Outcry Over Rising Crypto Mining Nuisance, Senator Seeks Governor’s Response

Rep. Patrick McHenry Indicates Progress on...

Watch Icon
Last updated

U.S. House Financial Services Committee Chair Rep. Patrick McHenry hints at possible advancements in stablecoin legislation, indicating potential progress before the upcoming election day. The post Rep. Patrick McHenry Indicates Progress on Stablecoin Legislation Before Election appeared first on Cryptonews.

Back to Top