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Custodia Bank CEO and Bitcoin Bull Reveals What Caused the Latest BTC Rally

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Custodia Bank CEO and Bitcoin Bull Reveals What Caused the Latest BTC Rally

Caitlin Long, CEO of digital asset custody firm Custodia Bank, recently attributed the latest Bitcoin (BTC) uptrend to dried-up supply on OTC desks.

Over-the-Counter (OTC) desks facilitate the trading of financial instruments between two parties without a centralized exchange. In crypto, OTC desks are commonly used for large trades, providing more privacy and tailored execution for institutional or high-net-worth investors.

Due to their prominence among institutional traders, trading activity on OTC desks is capable of influencing an asset’s price movements a great deal. Caitlin Long revealed that Bitcoin’s recent price uptick could have been triggered by increased demand amid a reduced BTC supply on these OTC desks.

Bitcoin Supply on OTC Desks Nearly Dried up

Taking to X, the Custodia Bank CEO disclosed that she recently spent some time in New York for a few days, and during her stay, she discovered the reason behind the recent BTC surge. According to her, institutions trading on OTC desks nearly ran out of BTC to buy.

The #HODLgang has mostly held…I spent time in NYC over the past couple of days and it’s clear why the #bitcoin price spiked this week: there was almost no #BTC available for sale on the big OTC desks…💎🙌

— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) March 1, 2024

Andrew, a Bitcoin and finance proponent, called attention to Long’s disclosure in a post today, noting that the drop in Bitcoin supply on OTC desks resulted in an inability to meet the surging demand for the token from institutional players.

When an X user asked for more context on the amount of BTC available on these OTC desks, Long personally replied. She confirmed that at some point on Wednesday, there were only 40 BTC tokens available for trading on OTC desks despite institutional investors eagerly looking to procure more tokens.

Only ~40 #BTC available for sale at any price at one point on Wednesday, I was told by a credible source…

— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) March 1, 2024

Andrew emphasized that this confluence of dried-up supply and increased demand resulted in the spike in Bitcoin’s price on Wednesday. Notably, BTC surged from an opening price of $57,037 to a top of $64,000 on Wednesday, marking an impressive 12% rise.

Wednesday, Feb. 28, was one of Bitcoin’s best days, as the asset breached multiple psychological resistance levels from $58,000 to $63,000. Despite witnessing intense resistance at the $64,000 high, the crypto asset held strong above $62,000, closing the day with a massive 9.46% gain.

André Dragosch, Head of Research at ETC Group, shared Glassnode data confirming the decreasing supply of Bitcoin on OTC desks. According to Dragosch, the BTC balance on OTC desks yesterday stood at 388 tokens as demand surged.

Data from CryptoQuant also confirms that institutional investors in the U.S. have continued to buy more BTC tokens, contributing to a high buying pressure. Notably, the Coinbase Premium Index recently recorded a massive spike as more institutions leveraged Coinbase for BTC purchases.

Meanwhile, BTC currently trades for $62,495 following the drop from $64,000. The asset shed off some of its gains yesterday but has begun recouping them with a 2.14% increase today. Veteran traders such as Peter Brandt expect the asset to hit $200,000 this cycle.