Major Banks Are Now Buying BTC Directly From Miners, Says Hut8 Mining CEO

Following the recent spot BTC ETF approval in the US, Bitcoin is becoming popular among TradFi institutions, leading to a massive surge in demand. Recent developments suggest that big banks contact Bitcoin miners directly to purchase BTC.

NEW: Big banks are now reaching out to #Bitcoin miners directly to buy #Bitcoin because of “supply shortages on exchanges.”
Per CEO of Hut8 Mining pic.twitter.com/nROJ3aPpY5

— Simply Bitcoin (@SimplyBitcoinTV) April 4, 2024

The CEO of Hut8 Mining, Asher Genoot, believes this direct approach from the banks is due to BTC shortages. He emphasizes an insufficient bitcoin supply amid surging demand.

Bitcoin Supply Shortage Forces Mega Banks to Transact with Miners

NEW: Hut 8 CEO Asher Genoot predicts fewer #Bitcoin
⛏️ miner bankruptcies in the future.

He says 2022’s high rates were due to companies’ excessive leverage in 2021, leaving them vulnerable to falling prices and rising energy costs. pic.twitter.com/mDTEacAIah

— Bitcoin News (@BitcoinNewsCom) April 4, 2024

According to reports, many banking institutions rely on miners to access Bitcoin due to the reported shortage. Hut 8 CEO Asher Genoot confirms this shortage in Bitcoin’s supply and predicts future bankruptcies for Bitcoin miners. According to the CEO, miners’ excessive leverage on the 2021 bull run left them vulnerable to falling prices and rising energy costs in 2022, and he sees such a scenario repeating in the future. 

Prominent entrepreneur Mike Alfred also weighed in on the Bitcoin shortage, recounting how several large banks contacted him intending to buy Bitcoin directly from his treasury. 

Further, Alfred believes that the banks have realized that large Bitcoin holders are not intent on selling, so they are doing whatever they can to get sellers. However, Alfred told his followers not to sell their BTC holdings. 

Meanwhile, Bitcoin halving is just a few weeks away and is expected to cause more shortages as block rewards are set to be reduced by half. Based on historical data, each halving leads to a surge in the price of Bitcoin.

This could be the driving factor for the increasing demand from institutions like banks pre-halving. 

Additionally, the introduction of Bitcoin ETFs on January 10, which attracted many institutional and retail investors to Bitcoin, could be another reason behind the shortage. According to Ailtra.ai, there are rumors that financial giant Morgan Stanley, with a market cap of $150 billion, is preparing to acquire Bitcoin ETFs.  

While Bitcoin’s price has remained below $70,000 for the past week, some investors view its price decline as an opportunity for accumulation.

Bitcoin Mining Market Capitalization Breaks Above $20 Billion as Halving Approaches

Despite Bitcoin’s supply shortage, the mining sector recorded a massive increase in its market cap value. Notably, the Bitcoin mining sector has surpassed a market cap of $20 billion and is currently valued at $20.6 billion. 

This remarkable achievement comes amid rising electricity costs and higher mining difficulty. This means the introduction of Bitcoin ETFs has increased mining profitability. 

Notably, since the ETF introduction, MicroStrategy, a company heavily invested in Bitcoin, has recorded a 22% surge in its share price. Also, CleanSpark is the miner that recorded massive profits, with a 51% increase on the year-to-date scale.

However, the upcoming Bitcoin halving will reduce miners’ block rewards from 6.25 to 3.125 BTC. Some experts believe a few miners will find it difficult to cover production costs due to reduced block rewards. 

But Bitcoin is currently down by over 10% from its newly attained all-time high of $73,750. However, market participants are optimistic that the upcoming Bitcoin halving will provide the boost BTC needs to break above $70,000 once more.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : TechReport – https://techreport.com/crypto-news/major-banks-are-now-buying-btc-directly-from-miners-says-hut8-mining-ceo/