- Could institutions that are buying tons of Bitcoin cause the next crash?
- The more Bitcoin these firms hold, the more danger they pose to the Bitcoin world
- For now, these firms buying bitcoin serves as a nice catalyst – but how long will the deal remain rosy?
If you’ve been in the crypto space more than a week, you’ll know all about these public companies that are buying up huge troughs of Bitcoin. For the most part, they’re lauded for the great work they’re doing and helping spread adoption, but is the fact they’re buying Bitcoin a good thing?
Grayscale has been buying up huge chunks of Bitcoin for months now and several other big firms have joined in, but what does this mean for Bitcoin?
Here Comes Cashout Time
There’s more than $6.7 billion invested in Bitcoin from these big investment firms, some of which are publicly traded firms. But, what happens when these companies see a new all-time high and think, ohh, let’s cash out. That huge movement of Bitcoin from their wallet to OTC desks will scare markets and cause massive dumps.
Despite trading on OTC desks so as to not impact the market price too much, the news of Grayscale of Galaxy Digital dumping Bitcoin will create shockwaves throughout the crypto world. People will panic sell, thinking that the fun is over and we’ll see a VERY red day for Bitcoin.
As Centralized as XRP
Everyone hates XRP because it’s so centralized and Ripple owns most of the tokens. As more and more Bitcoin is bought up by a handful of big firms, Bitcoin runs the risk of getting tarnished with the same brush. Imagine if financial institutions own 25% of all Bitcoin in circulation. A lot of people won’t be happy about that and we could see a lot of Bitcoin maxis ditching Bitcoin for an offshoot that’s more decentralized
Time Will Tell
It’s still early days with institutions buying up Bitcoin, but if they continue to buy in bulk, we could be heading into stormy waters. For now, their intentions look good and clean, but just a single sell from one of these firms could cause huge panic throughout the Bitcoin world.
