The popularity of Bitcoin keeps increasing, as institutions buy more of the cryptocurrency. According to Cointelegraph.com, 24 institutional investors hold more than 460,000 BTC, which is almost 3% of the cryptocurrency’s total supply. According to the source, large buys by institutions reduce the circulating supply of Bitcoin. That is because the supply of this cryptocurrency is limited and cannot be expanded through additional mining.
Close to the end of last year, institutions already started investing large sums into cryptocurrency. In December, a Canadian Public firm Cypherpunk Holdings increased its holdings of crypto to 276.479 BTC. In the same month, an American insurance company MassMutual announced a purchase of Bitcoin worth $100 million.
A blockchain software company Block.one holds over 140,000 BTC, and MicroStrategy owns about 71,079 BTC. Moreover, Tesla also recently announced acquiring $1.5 billion in Bitcoin, which drove the most popular cryptocurrency’s price to over $40,000 per coin after the announcement.
Why are institutions investing in Bitcoin now, even though the worldwide cryptocurrency adoption still seems rather far away? According to Barron’s, some of the companies invest because of their founders’ interest in Bitcoin. Moreover, institutions might invest because of an increase in customer demand or increasing cryptocurrency acceptance by the government, the source says. Besides, companies could think of other potential uses of cryptocurrency.