Bitcoin Liquidity Crisis Around the Corner?

The continued influx of institutional investments into Bitcoin is creating a scenario where the demand could soon outstrip the available supply.

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Here's what we've got for you today:

  • Bitcoin Predicted to Face ETF-Induced Liquidity Crisis in Six Months

  • Tether Collaborates with US Government in Major Fraud Seizure

  • Final Arguments Begin in COPA Case Against Craig Wright Over BTC Claims

  • Coinbase Shares Dip After-Hours as Exchange Plans $1B Convertible Notes Offer

An analysis by Ki Young Ju suggests a potential Bitcoin supply crunch leading to a sell-side liquidity crisis could be a mere six months away.

  • This prediction is based on the current trajectory of institutional inflows into the crypto market, especially through United States-based spot Bitcoin ETFs, which have seen unprecedented success.

  • The continued influx of institutional investments into Bitcoin is creating a scenario where the demand might soon outstrip the available supply.

  • Young Ju points out that with ETFs alone absorbing more than 30,000 BTC last week and with known entities like exchanges and miners holding around 3 million BTC, a supply-induced price shock is becoming more probable.

The U.S. Attorney's Office in Chicago, in collaboration with Tether and other federal agencies, confiscated $1.4 million in Tether USDT as part of a crackdown on a fraud operation.

  • The stolen funds were believed to be from a complex customer support scam focusing on exploiting vulnerable groups, especially the elderly, by persuading them to convert their bank funds into USDT under the guise of asset protection.

  • This scam resulted in victims losing access to their money, with the fraudsters stopping all communication after securing the funds in their possession.

  • Tether played a vital role in the seizure and expressed pride in their cooperation with the U.S. government to fight financial fraud in the crypto space.

The Crypto Open Patent Alliance has tried to show that Wright cannot be Bitcoin inventor Satoshi Nakamoto.

  • Closing arguments in the lawsuit filed by the Crypto Open Patent Alliance (COPA) against Craig Wright, who claims to be Bitcoin's inventor Satoshi Nakamoto, began in London on Mar. 12.

  • COPA's goal in the lawsuit is to get a court order to stop Wright from continuing to claim he is Nakamoto.

  • Wright has been accused of massive forgery of the documents he used to support his claim of being Nakamoto.

Coinbase plans to secure $1 billion through the issuance of senior convertible notes, in an effort to repay debts.

  • The senior convertible notes, which can be transformed into equity like stock, will be exclusively available to qualified institutional buyers, with a repayment deadline set for Apr. 1, 2030.

  • These notes serve as an effective way for companies to raise money, and Coinbase is seizing the opportunity to take on debt as investors seem confident in the company.

  • Coinbase plans to allocate the proceeds from these notes towards the repayment of its existing outstanding convertible notes that are due in 2026, 2028, and 2031.



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