Bitcoin (BTC) price again rose above the $ 16,000 level and started to give images reminiscent of 2017. Grayscale recently added $ 115 million to the Bitcoin fund, revealing one of the reasons for this surge. So, what does the 115 million dollar BTC investment made in a single day actually show to investors?
After a long time, the BTC price first tentatively hit $ 16,000 on November 11. The date of November 12 is known as the day when the BTC / USD parity increased up to $ 16,400. Grayscale Investments general manager Michael Sonnenshein stated in a current statement that they made a massive purchase of BTC on November 12.
— Michael Sonnenshein (@Sonnenshein) November 13, 2020
Who can invest in the Grayscale Bitcoin fund?
So what does it mean for Grayscale to keep investing in Bitcoin? Looking at the Grayscale Bitcoin investment page, it can be seen that not everyone can invest in this fund. In order to invest in Grayscale, it is required to be accredited investor status under US securities laws. For this, a person must earn more than $ 200,000 a year (or have a total income of $ 300,000 a year with his spouse), have a net worth of more than $ 1 million excluding the value of the property they reside, or have a Series 7, Series 65, or Series 82 certificate. In addition, institutions with liquid assets of more than $ 5 million are also accepted as accredited investors.
So, as you can see, Grayscale is actually buying and protecting it for high-level and institutional investors when buying Bitcoin. In October, Grayscale CEO Barry Silbert stated that the fund has more than $ 7 billion in BTC and other cryptocurrency assets. Now it is known that this fund has swelled even more.
Famine could begin for Bitcoin
It is known that Bitcoin can only have a total supply of 21 million. However, Grayscale’s continuous purchase of BTC “triggers” the fixed supply with a completely unbalanced and increasing demand element. Lark Davis, one of the well-known names in the sector, touched on this exactly in his statement on the subject.
Davis noted that in the first week of November, miners were only able to mine 6,300 BTC. Grayscale, on the other hand, purchased 16,000 BTC, almost three times that amount, in the same period. Davis, on the other hand, stated that this would create a bitcoin scarcity, and actually pointed to the record rise. The recent increase in the market value of BTC above $ 300 billion is also seen as a sign of supply and demand imbalance.
Grayscale bought 16,000 #bitcoin last week.
Miners created 6,300.
Grayscale bought 2.5X more $btc than was produced!
INSANE SCARCITY coming into effect!
— Lark Davis (@TheCryptoLark) November 6, 2020