Bitcoin supply bottleneck increases as Grayscale buys nearly three times the BTC mined in December

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Institutional crypto-investment giant Grayscale now has $ 20 billion under its control as its Bitcoin (BTC) outperforms production by nearly three to one.

As data analytics resource Coin98 Analytics noted on Friday, Grayscale bought almost three times more BTC than the amount added to the market in December 2020.

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It’s official: miners can’t produce enough bitcoin

Last month, the company added a total of BTC 72,950 ($ 2.132 billion) to its assets under management (AUM). During the same period, miners earned just 28,112 BTC ($ 821.7 million) – 38.5% of Grayscale’s buy-in.

The numbers underscore what many have described as a persistent bitcoin liquidity squeeze, with big buyers sucking up all available supplies, retiring them, and sending them to a cold store for long-term settlement.

As Cointelegraph reported, the phenomenon was already visible in November 2020, but in December 2020 the demand for grayscale and other institutional units increased significantly.

BTC mined or bought by Grayscale in December 2020. Source: Coin98 Analytics / Twitter

Grayscale now controls $ 20 billion worth of crypto

As the clock rang midnight on New Year’s Eve, Grayscale CEO Barry Silbert celebrated the increase in the company’s total AUM across its various crypto funds to over $ 20 billion. A year ago it was only $ 2 billion.

Managed grayscale crypto assets as of December 31, 2020. Source: Grayscale / Twitter

The company remains the largest institutional player in the Bitcoin scene. With $ 17.475 billion in BTC, it far surpasses any other market participant. Newcomer MicroStrategy, while not an investment firm, now controls BTC 70,470 ($ 2.06 billion).

Analysts assume that a higher demand for the fixed supply of “new” Bitcoin by miners will only serve to trigger a bidding war and increase the price. Sellers faced strong buyer determination back in December 2020 when new all-time highs did not produce significant permanent pullbacks.