The availability of Bitcoin (BTC) on Over-the-Counter (OTC) desks has declined sharply, with reports suggesting that at one point there were only around 40 BTC available for sale. This news has significant market implications and could herald a new era in BTC trading dynamics.
OTC desks had 40 Bitcoin available on Wednesday
Caitlin Long, the CEO and founder of Custodia Bank, gave a startling account of the current state of the OTC Bitcoin market. Through a series of posts on X (formerly Twitter), Long noted“The #HODLgang has mostly held firm… I’ve spent time in New York in recent days and it’s clear why the Bitcoin price spiked this week: there was almost no BTC for sale on the major OTC desks.”
Echoing Long’s observations, Samuel Andrew, a well-known figure in the crypto space, added: “OTC desks have all but dried up. There is very little Bitcoin available that is easily accessible to meet demand. BlackRock and Fidelity are resizing in a way that crypto has never seen before.” Long added:
At one point there were only ~40 BTC available for purchase at any price on Wednesday, I was told by a credible source…
This scarcity of BTC on OTC counters is not an isolated incident, but part of a broader trend that indicates a significant shift in the market. Glassnode, a leading blockchain data and analytics company, reported that Bitcoins held by OTC agencies are at their lowest level in five years. Although Glassnode only tracks a portion of the OTC market, the data points to a clear trend of decreasing BTC availability.
What this means for the BTC price
The implications of this trend are numerous. First, it signals a potential supply shock in the Bitcoin market, driven by increased demand from institutional investors and large corporations looking to add Bitcoin to their portfolios, as well as the introduction of spot Bitcoin ETFs. This supply shock could lead to a shift in price discovery from OTC agencies to public exchanges, where Bitcoin’s true market price will be determined more transparently.
The shortage of Bitcoin on OTC desks also means that major investors and ETFs like BlackRock and Fidelity, who traditionally bought Bitcoin in bulk at a discount through these desks, may no longer have this option. This could further stimulate demand on the public exchanges, potentially leading to significant price movements.
Analysts are already speculating about the possible outcomes of this situation. Alessandro Ottaviani, a leading analyst, suggested“After today, God candles ($10,000 per day), before the halving, are possible and realistic.”
This feeling was echoed by Francis Pouliot, CEO of Bull Bitcoin, who commented on the self-correcting nature of the market: “OTC agencies like http://BULLBITCOIN.COM never run out of Bitcoin. The price goes up and people sell. If people don’t sell, the price will continue to rise.”
Adam Back, a Bitcoin OG and cypherpunk, as long as a bullish outlook, stating: “$100k on halving day. People are starting to believe. Bears, leveraged shorts, fear mongering, profit taking limit orders have gone up or just removed to wait and see; OTC desks without coins, daily $500 million / 10k BTC ETF buy walls. This can quickly go up. 51 days to go [until Halving].”
In short, the depletion of BTC supply on OTC desks marks a pivotal moment for the market. With the upcoming halving in April and institutional interest at an all-time high, the stage is set for potentially unprecedented moves in the Bitcoin market.
At the time of writing, BTC was trading at $61,903.
Featured image created with DALLE, chart from TradingView.com
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