Demand for Bitcoin has gained tons of traction within Q3. It’s grown so much, it has outstripped the new supply for mining. Square a payment processing company that issues Bitcoin as reported in Q3. They did 1.6 billion dollars in Bitcoin sales. The amount that square has sold is roughly double the amount mined over the same time duration, which is around 160,000 BTC.
This is 11x’s what they did last year in Bitcoin sales, showing a major up tick in demand for Bitcoin. This most certainly is bullish, looking forward as supply diminishes and demand rises. Square isn’t the only company seeing changes, Grayscale has added 40,000 BTC to their balance sheet in October. In that same month, roughly 27,000 Bitcoin were mined. This is a clear indication of demand out pacing supply and production. PayPal, one of the worlds most dominant payment services has enabled Bitcoin purchases from users accounts.
In fact, Dan Schumann (CEO of PayPal), has raised its buying limits for the cryptocurrency after seeing that the demand was two to three times their expectations. Founder of Capriole Investments on Twitter, ‘Charles Edwards’ stated that “the crypto industry may be facing a supply crisis.†He made arguments that companies like Square and Grayscale are facing demand which exceeds the number of mined Bitcoins. He pointed to the fact that 163,000 Bitcoin sold by Square in Q3 2020 was double the amount that was mined during the same quarter. Now what does this mean for the crypto space?
Well asset prices always come down to these two simple factors supply and demand. It’s clear that we have raising demand and a dwindling supply for bitcoin and as a symptom of this we have bitcoin gaining value in terms of asset prices. I believe this is just the beginning, the supply isn’t going to increase due to the nature of bitcoins protocol but the demand can always change and as this asset get more scares and demand increase this can drive asset prices much high.