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Square Sells Off Bitcoin At Quicker Rate

Square sold a record 160,000 Bitcoin in Q3 2020. As it stands, consumer demand for Bitcoin far outstrips new supply from mining.

The U.S. is in the midst of a Bitcoin boom among financial services companies. Investment funds and payment providers which offer BTC are selling record quantities. For instance, financial services company Square generated $1.6 billion in BTC revenues in Q3—up 11x from last year—from its mobile payments app CashApp.

Investment funds are also buying and holding Bitcoin in huge quantities. Grayscale added 40,000 BTC to its balance sheet in October, much more than 27,000 Bitcoin which were mined during the month.

More recently, payments giant PayPal enabled Bitcoin purchases from their accounts. Shortly after adding the featured, CEO Dan Schulman raised buying limits for the cryptocurrency after seeing that demand was “two times to three times of what our expectations were.”

As a result, the crypto industry may be facing a supply crisis, said Charles Edwards, founder of Capriole Investments on Twitter. He argued that companies like Square and Grayscale are facing demand which exceeds the number of mined Bitcoins. He pointed to the fact that 163,000 Bitcoin sold by Square in Q3 2020 was double the amount that was mined during the same period

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