Impact of Bitcoin Over-the-Counter Availability on BTC Price

Bitcoin (BTC) is showing strong momentum, nearing its all-time high of $73,750. As of now, the cryptocurrency is trading at approximately $72,200, just a few hundred dollars shy of breaking the previous record. Analysts are closely monitoring how over-the-counter (OTC) availability might influence Bitcoin's price in the near future.

ETF Demand Driving Bitcoin Rally

According to a recent report by CryptoQuant, the surge in Bitcoin's price is largely attributed to increased net purchases from U.S. spot exchange-traded funds (ETFs).

• Daily purchases have escalated from 1,300 BTC at the beginning of the month to 5,800 BTC by October 29.
• The highest daily purchase recorded was 7,700 BTC on October 13.
• Despite this growth, daily purchase volumes remain below the peak levels seen in February and March, when purchases reached as high as 16,000 BTC. This discrepancy raises concerns about Bitcoin's ability to reach new highs despite the rising ETF demand.

OTC Desk Balances and Market Dynamics

In the first quarter of 2024, Bitcoin saw a significant rally while the balance of BTC on OTC desks was negative. Currently, however, the situation has reversed, with approximately 416,000 BTC available on OTC desks, up from a balance of 183,000-193,000 BTC earlier this year.

• The increased availability of Bitcoin on OTC desks means that daily ETF purchases now represent only 1% to 2% of the total BTC balance on these desks, a significant drop from the 9% to 12% share observed in Q1 2024.
• Analysts suggest that higher ETF demand will be essential to decrease the Bitcoin inventory on OTC desks.

Trends in OTC Desk Inflows

Despite the growing balances on OTC desks, the rate of increase has slowed down.

• The monthly growth of BTC on OTC desks is currently around 3,000 BTC, a stark contrast to the much higher inflows of 77,000 BTC and 92,000 BTC seen in June and August.
• The correlation between declining inflows and rising BTC balances on OTC desks could potentially hinder Bitcoin's ability to reach new price highs.

For Bitcoin to continue its upward trajectory and hit new all-time highs, it is crucial that ETF demand increases while OTC desk inflows remain low. The interplay between these factors will be essential in shaping the future price movements of Bitcoin.