Bitcoin (BTC) is on track to reach or even exceed gold's market value. In fact, when the digital currency was trading around $ 100, its value had already reached roughly 10% of gold's market capitalization.

Currently, gold's market value is around $ 10.7 trillion. Bitcoin, by contrast, has approximately $ 1.1 trillion.

Obviously, this brings out the idea that BTC is already overshadowing gold as safe haven currency. Accordingly, it will soon become an obstacle to the growth of the yellow metal.

Now, crypto-lending firms, including Genesis and BlockFi, are cutting the interest rates they pay on large-scale Bitcoin deposits, potentially ending the glorified 4- 6% levels that have served as a staple of the lucrative market. And because of this, demand from large traders is dwindling, according to industry executives.

Apparently, there are too many Bitcoins looking for yield versus institutional demand, so lenders try to protect their margins by lowering deposit rates.

Therefore, starting Thursday, Genesis Global Trading will refinance its Bitcoin deposit rates from 2% to 3.5%, while BlockFi is going to reduce it from 3% to 2%.

This follows what analysts and industry leaders said earlier: the key factor that would drive institutional borrowing down is a shift away from the so-called "grayscale premium."

This refers to the difference between BTC price in the cryptocurrency spot markets and the BTC price at net asset value (NAV).

For example, when Grayscale Trust trades at the NAV, hedge funds and other investors could take Bitcoins and transfer them in exchange for GBTC shares. Then, after a six-month close, shares could be sold on the secondary market to retail investors, usually at a premium. Proceeds are then used to pay the lender.

But based on the current GBTC discount, large traders no longer have an incentive to borrow BTC.

And given the current situation of the industry, some crypto lenders believe it is time to take their market share.