Bitcoin (BTC) could have a massive supply shock according to Troy Gayeski, senior portfolio manager at SkyBridge Capital. In a recent conversation with Bloomberg, the expert said that holders are accumulating now that the price of the virtual currency is stable close to $32,000. At the same time, PayPal has increased the limit for crypto purchases to $100,000 per week.
There Could be a Massive Bitcoin Supply Shock
As explained by Troy Gayeski, investors are accumulating Bitcoin and holding their coins for a long period of time. That means that these investors are not pushed by short-term gains. Instead, they want to hold their virtual currencies for months or even years. At the same time, those who are selling are investors that entered the market when the price of Bitcoin surged and now they want to go out.
Gayeski analyses on-chain data in order to understand Bitcoin trends and how the market evolves. He has also mentioned how these holders could create a type of supply shock in the coming months.
On the matter, Gayeski said:
“When we look right now at the on-chain, data what is basically telling you is that a lot of strong holders are reasserting themselves and accumulating from those that got into the market late last year. And that it is setting itself up for some type of supply shock, very similar to what we had last October, November.”
Despite that, Bitcoin could continue to be a volatile asset. Nonetheless, in recent months, Bitcoin has been traded between $30,000 and $35,000 with some short periods of time above that level. Gayeski believes that Bitcoin will continue to operate as a non-correlated asset.
Gayeski’s comments come at the same time PayPal announced that it is increasing the purchase limit for customers in the United States from $20,000 to $100,000. That means that there could be a larger buying pressure from PayPal users in the cryptocurrency market.
Since 2020, PayPal users in the United States are able to get access to cryptocurrencies for trading and to spend them. Nowadays, eligible customers are able to buy as much as $100,000 per week in digital currencies.
The volume of crypto transactions in PayPal could reach as much as $200 million as the CEO Dan Schulman informed. At the moment, there are almost 400 million clients that could be ready to start operating cryptocurrencies using their PayPal accounts. If they decide to do so, this could also be part of the supply shock Gayeski was talking about.