The growing popularity of Bitcoin spot exchange-traded funds (ETFs) is raising concerns about a looming supply shortage in the cryptocurrency market.
Bitcoin Supply Tightness Begins as Wall Street Banks Want to Buy Directly from Miners
Hut 8, one of the leading publicly traded Bitcoin mining companies in the United States, announced that major banks have recently reached out to the company with requests to purchase Bitcoin directly from the miner.
Bitcoin spot ETFs have witnessed an investment inflow of over $12 billion since their launch on January 11. This increase in demand led to more than 211,000 Bitcoins being converted into shares, creating a cryptocurrency shortage on centralized exchanges.
The resulting supply shortage has prompted banking institutions to approach at least one Bitcoin mining company, such as Hut 8, with the aim of obtaining Bitcoin directly from their holdings.
Asher Genoot, CEO of Hut 8, explained in his statement that the company was contacted by banks that wanted to benefit from its significant Bitcoin reserves.
With a market value approaching $1.2 billion, Hut 8 is among the largest publicly traded Bitcoin mining operations worldwide.
The firm's Bitcoin assets, worth nearly $600 million, make it the fourth-largest holder of the cryptocurrency among publicly traded companies.
Genoot explained that banks' interest is focused not only on Hut 8's existing Bitcoin reserves, but also on its production capabilities. Although he declined to identify the institutions, he said they represent some of the largest banks in the industry.
*This is not investment advice.
