institutional investment

Bitcoin’s Bull Market Is Just Warming Up as Indicated by Large Outflows and Institutional Interest

Bitcoin (BTC) is back to the $50,000 mark by gaining 5% in the last 24 hours to trade at around $51,470 at the time of writing, according to CoinMarketCap.

The leading cryptocurrency has been trying on several occasions to surge past this level as a price correction has been imminent ever since it hit an all-time high of $58,300.

Veteran on-chain analyst Willy Woo believes that BTC is getting ready for the next bull run. He explained:

“The increase in Bitcoin users (is) visible on its blockchain per day. Retail investors arrived in Jan. Like prior cycles, I expect this peak to top out higher than the ones before it. It gives you an idea how this bull market is just warming up.”

Willy Woo acknowledged that more participants were joining the BTC bandwagon, which would be instrumental in triggering the next uptrend. Bitcoin has been gaining strong momentum, which has been pivotal in surpassing the $48k barrier deemed the institutional resistance level.

The surge past $50K is different this time round

Crypto analyst Joseph Young has delved deeper into the present price of approximately $50,000 and explained that it is triggered by large outflows and institutional interest. He noted:

“Hello Bitcoin $50k, we missed you. Difference? This time it’s at $50k with default funding, no overcrowded futures market, spot market parity with futures, and high Coinbase premium, coupled with large outflows and institutional interest.”

BTC outflows from crypto exchanges have been heavy, signifying a holding culture as more participants are storing BTC for speculative or future purposes – which indicates bullish behaviour. These sentiments are echoed by unfolded. The crypto data provider stated:

“According to Glassnode, HODL waves, 3.3m Bitcoin or 17.87% of circulating supply hasn’t been moved for over 7 years.”

With billions expected to enter the BTC network as more entrepreneurs are looking up to the richest man on earth Elon Musk and following his footsteps, time will tell how Bitcoin’s journey to the moon shapes up.

Institutions See the $46-48K Range as the Perfect Opportunity to Accumulate More Bitcoin

Bitcoin’s price has been fluctuating between $46,000 and $48,000.

Institutions are seeing this drawback as the ideal position needed to accumulate more BTC, as acknowledged by CryptoQuant CEO Ki Young Ju. He explained:

“12k BTC flowed out from Coinbase again. Institutions are still accumulating BTC in this range.”

He added:

“It seems most US institutions haven’t sold any Bitcoin since their OTC deals. For example, here are custody wallets from Coinbase outflows on Dec 23, 2020. No BTC moved since then.”

A few days ago, IntoTheBlock revealed that $48,000 had emerged to be a significant institutional resistance level based on the considerable number of Bitcoin bought at this range. The crypto data provider stated:

“Bitcoin surpasses the $48,000 barrier again. The IOMAP indicator reveals that BTC is now facing the most significant level of on-chain resistance. Approximately 1.03m addresses previously bought over 425k BTC at the range between $48,335.62 and $49,150.01.”

Sustaining the $46-48k range is crucial

On-chain analyst Rafael Schultze-Kraft has delved into the current price range, which he believes has considerable on-chain support. He noted:

“Very strong on-chain support at $47k – around 500,000 BTC have been moved at that level. In my opinion, it is important that we hold it. Otherwise, we could see low forties quickly before the next upwards movements.”

Rafael Schultze-Kraft sees the worst-case scenario as a price drop to the $40-43k range before an uptrend sets foot, as echoed by crypto analyst Lark Davis who believes that the second wave of the present bull run is gaining momentum after the first one made Bitcoin hit an all-time high (ATH) of $58,300 on Feb 21.

There seems to be light at the end of the tunnel for BTC as Tech Billionaire Tim Draper recently disclosed that Netflix might be the next fortune 100 company to invest in the leading cryptocurrency.

Bitcoin Hits Two-Week High as Institutional Inflow Continues Trickling In

Recently, Bitcoin (BTC) has been retesting the $50,000 level after a price correction drove it to lows of $42,000.

The leading cryptocurrency is holding its head high after hitting a two-week high by surging past $54,000, representing 11.14% in the last one week, according to CoinMarketCap.

Big money bets

Edward Moya, a senior market analyst at Oanda, asserted that institutional interest is still going through the roof, and this is advantageous for BTC. He shared with Bloomberg:

“Bitcoin and Ethereum bullishness are back as more big-money bets keep flowing into cryptocurrencies.”

This price surge has been instrumental in making Bitcoin’s market value surpass $1 trillion for the second time after hitting an all-time high (ATH) of $58,300 on Feb 19.

An overwhelming appetite by institutional investors has been the fuel behind BTC’s bull run. For instance, leading American business intelligence firm, MicroStrategy recently scooped another 205 Bitcoins at an average price of approximately $48,888 per coin and at an estimated value of $10 million.

Moreover, different corporate players are joining the BTC bandwagon, as evidenced by Meitu Inc.’s purchase of Bitcoin worth $17.9 million. This Chinese company specializes in providing photo-editing and sharing video processing software for smartphones.

Bitcoin is up by 570% from the past year

Bitcoin has made notable moves in the last 12 months, skyrocketing by 570%. The top cryptocurrency went to the next level after breaching the then ATH of $20,000 in December 2020 set more than three years ago.

Bitcoin’s winning ways were recently restored after the Senate passed President Joe Biden’s $1.9 trillion COVID-19 stimulus package. This coupled with high institutional investments seems to continue boosting BTC’s journey to the moon as more participants continue trickling in.

Bitcoin Has to Hold above $52,000 to Avoid Further Downward Movements, says Crypto Analyst

Bitcoin (BTC) has renewed speculations from analysts that it could retest its all-high price (ATH) of $58,300 set last month – after it surged to the $55,600 level in the past few days.

It has, however, retraced to $54,673 at the time of writing, according to CoinMarketCap.

Veteran crypto analyst Michael van de Poppe believes BTC has to hold the $52k level for an upward momentum to be ignited. He explained:

“Beautiful rejection on the $56,000 area for Bitcoin here. If the $52,000 area holds, we can see further sideways action and renewed tests of $56,000. However, once again, $52,000 is critical to hold to avoid further downwards moves.”

The analyst believes that once the $52k level is held, a raging market will emerge, and this will prompt a price momentum that will test the $56,000 resistance before another ATH is set.

BTC’s renewed momentum has been renewed as institutional interest is going through the roof based on big-money moves. This price surge has been pivotal in making Bitcoin skyrocket by 570% in the last 12 months.

Bitcoin futures perpetual funding rates are warming up

According to Moskovski Capital CEO, Lex Moskovski, BTC futures perpetual funding rate has started gaining momentum, which is a bullish signal. He acknowledged:

“Funding has started to warm up again. Not exactly February’s levels but a notable jump nonetheless. People are getting increasingly bullish.”

An increase in Bitcoin futures perpetual funding rates illustrates that people are using leverage to buy BTC instead of spot buying. As a result, showing the willingness of more users to join the Bitcoin network.

Recently, twenty-five publicly traded companies showcased their financial muscle as they hold a total of 178,855 on their balance sheet worth a whopping $9.6 billion. They include Tesla Inc, Microstrategy Inc, Voyager Digital LTD, Galaxy Digital Holdings, Meitu, and Square Inc, among others.

If the $52,000 support level holds, as alluded to by Michael van de Poppe, Bitcoin may be set for a new ATH in the near future.

25 Publicly Traded Companies Hold a Total of 178,855 Bitcoins Worth $9.6 Billion

Bitcoin’s spark is back as the top cryptocurrency surged past the $54,000 mark, pushing its value above $1 trillion. BTC has been up by 9% in the last 24 hours to trade at $54,002 at the time of writing, according to CoinMarketCap.

New data by digital asset firm Bloqport reveals that 25 publicly traded companies now hold a total of 178,855 Bitcoin on their balance sheets worth $9.6 billion. They include Tesla Inc, Microstrategy Inc, Voyager Digital LTD, Galaxy Digital Holdings, Meitu, and Square Inc, among others.

Institutional investment has been a remarkable driving force behind Bitcoin’s bull run as corporate giants have been on a spending spree. For instance, a few days ago, leading business intelligence firm Microstrategy added 205 BTC worth $10 million to its portfolio.

Fears of asset devaluation

Market analyst Holger Zschaepitz believes that the high institutional demand for Bitcoin is being fueled by fears around asset devaluation as global governments continue adopting financial incentives like quantitative easing needed to bail out their economies from the grappling effects of COVID-19.

For instance, the US administration recently passed a $1.9 trillion COVID-19 stimulus package and this pushed BTC’s price above the $50,000 mark.

Bitcoin is, therefore, continuously cementing its status as an inflationary hedge; hence pushing institutional interest through the roof.

Furthermore, its neck and neck race with gold for a safe-haven asset continues even though CoinMetrics has noted that their correlation has weakened since late 2020. The crypto asset firm explained:

“Bitcoin has had almost basically no correlation to gold since late 2020.”

Mira Christanto, a researcher at MessariCrypto, believes that BTC can flip gold’s market capitalization of $10.67 trillion if it hits a price of $550,000 as its value has risen by 574% in the last 12 months.

As stimulus spending and inflation fears continue soaring, time will tell how Bitcoin’s bull run will unfold.

Institutional Bitcoin Adoption in Asia is Making a Big Step Forward

After hitting lows of $48k over the weekend, Bitcoin (BTC) has soared to $54.3k at the time of writing, according to CoinMarketCap.

Bitcoin adoption in Asia is taking a new turn as more institutional investors are joining the network, as acknowledged by Joseph Young. The crypto analyst explained:

“The biggest gaming company in South Korea, Nexon, bought $100 million worth of Bitcoin. Nexon also bought Bitstamp and Korbit, two major exchanges in Europe and South Korea, in the past three years. This is a big step forward for institutional BTC adoption in Asia.”

Earlier on, Young had revealed that crypto interest in Asia was brewing, which showed long-term optimism in the market.

Nexon Co. joins a growing list of global tech companies embracing Bitcoin, like American electric carmaker Tesla. The online game provider bought 1,717 BTC, which broke the record as the largest-ever purchase of cryptocurrency by a company traded in Tokyo.

In February, Tesla acquired Bitcoin worth $1.5 billion, and a month later, the company’s CEO Elon Musk revealed that customers could buy vehicles using BTC.

Bitcoin’s surge is expected to continue

Bitcoin has been in a consolidation state ever since it hit an all-time high above $64k recently. The top cryptocurrency nosedived to lows of $48.5k over the weekend as speculations about the U.S. President Joe Biden’s administration increasing capital gains taxes took center stage in the crypto space.

Nevertheless, Yann & Jan, the co-founders of leading on-chain metrics provider Glassnode, believe that BTC’s surge is unstoppable. They explained:

“With all that frictious leverage wiped out of the system Bitcoin is unstoppable.”

Bloomberg’s senior commodity strategist, Mike McGlone, believes that there are enough catalysts surrounding BTC that can easily push its price to $100,000. For instance, the perception that Bitcoin is an alternative to cash and the growing number of proposed Exchange Traded Fund profits are part of the core catalysts for the coin.

With Bitcoin’s transaction volume reaching a monthly high of $4.45 billion, as alluded to by Glassnode, time will tell whether the top cryptocurrency will hit a price tag of $100,000 in 2021.

MicroStrategy Acquires Extra 13,005 Bitcoins, Owning Over 100,000 BTC

Leading American business intelligence firm MicroStrategy is not relenting in its quest of purchasing more Bitcoin, acknowledged by the firm’s CEO Michael Saylor.

The MicroStrategy CEO said:

“MicroStrategy has purchased an additional 13,005 Bitcoins for ~$489 million in cash at an average price of ~$37,617 per bitcoin. As of 6/21/21 we hodl ~105,085 bitcoins acquired for ~$2.741 billion at an average price of ~$26,080 per bitcoin.”

MicroStrategy has set a precedent in the institutional investment space because its BTC holding is one of the highest.

Previously, Saylor had indicated that the firm was embracing Bitcoin for the long term.

MicroStrategy, therefore, seems to be taking advantage of the current ranging BTC market because it has spent the last two months consolidating between $30,000 and $40,000.

Bitcoin is back at the range low

Bitcoin plunged to lows of $32k amid intensified FUD (fear, uncertainty, and doubt) sentiment from China triggered by a nationwide BTC mining crackdown.

For instance, China’s third-largest bank, the Agricultural Bank of China, issued an announcement prohibiting bitcoin and other cryptocurrency transactions through Agricultural Bank’s banking system.

These restrictions imposed by Chinese banks on cryptocurrencies caused a large-scale sell-off of the Bitcoin bearish side.

Therefore, market analyst Michale van de Poppe noted that Bitcoin was back at the range low, and the leading cryptocurrency needed to hold this area to avoid a further drop to $24k.

On-chain analyst Ali Martinez echoed these sentiments. He stated:

“On-chain data from IntoTheBlock shows that the most significant support zone underneath Bitcoin sits between $31.7K and $33.5K where roughly 573K addresses bought 487K BTC. Losing this area as support could push BTC to the next critical demand barrier at $23.4K.”

With retail momentum on the Bitcoin network slowing down amid sinking social sentiment, it remains to be seen whether renewed institutional interest from firms like MicroStrategy will give BTC the much-needed upward momentum.

Only a Small Fraction of Institutional and Corporate Money Entered into Bitcoin Market

As Bitcoin (BTC) continues consolidating between the $30k and $40k range for more than two months, the crypto community is waiting with bated breath to see its next move.

Nevertheless, the amount invested by institutions and corporates in the Bitcoin market is a small per cent of their total cash reserve.

Market analyst Lark Davis explained:

“There are around 41,000 publicly traded companies globally, of which less than 2 dozen have taken positions in Bitcoin.”

He added:

“Publicly traded companies have around 10 trillion in cash reserves globally. Of that, around 6 billion has been invested into BTC as a way for companies to get off the sinking ship of fiat. Yes, just 0.06% of publicly-traded company cash has entered BTC.”

MicroStrategy, a leading American business intelligence firm, has been setting the ball rolling in the institutional BTC investment arena. For instance, it acquired additional 13,005 Bitcoins last month, bringing its total portfolio to 105,085 BTC.

Institutional investment has been the engine behind the recent remarkable bull run, which saw Bitcoin’s price rise from $20K in December 2020 to an all-time high (ATH) of $64.8K recorded in mid-April.

Bitcoin funding rates on perpetual futures remain negative

According to on-chain metrics provider Glassnode:

“Bitcoin funding rates on Perpetual Futures markets have been consistently negative since the sell-off in May. The last time funding rates remained negative for such an extended period of time was in Mar-Apr 2020.”

Despite the BTC funding rates remaining negative, new users entering the network are on a record-breaking move, as acknowledged by William Clemente III. The on-chain analyst pointed out:

“Bitcoin making all-time highs in new users coming on the network.”

As Visa card holders’ crypto spending topped $1 billion in the first half of this year, it remains to be seen whether institutional investments will jumpstart the consolidating Bitcoin market.

Fidelity Study Shows 70% Institutional Investors Eyeing for the Crypto Market

Despite institutional investment in the crypto market evaporating, a study conducted by Fidelity Digital Assets found out that 70% of institutional investors are still eyeing this field in the future.

Price volatility is considered as the biggest stumbling block to new entrants, followed by the lack of fundamentals needed to assess value and concerns around market manipulation, according to Reuters, citing the Fidelity study.

Yet, price volatility is not new to the crypto market, as evidenced by the fact that Bitcoin (BTC) shed off more than 30% of its value in a single day to hit lows of $30K on May 19 from an all-time high (ATH) price of $64.8K recorded in mid-April.

It, therefore, shows that new institutional investors in the crypto space are keeping fingers crossed to see how price volatility transpires. Meanwhile, around 90% are eyeing crypto investment in the next five years.

The study noted:

“Around 90% of those interested in investing in the future said they expected their company’s or their clients’ portfolios to include digital asset investments within the next five years.”

Additionally, more than half of the 1,100 institutional investors surveyed between December and April disclosed that they own crypto investments. Those interviewed included digital and traditional hedge funds, high net worth investors, financial advisors and endowments, and family offices.

Market analyst Lark Davis recently stated that the amount invested by institutions and corporates in the BTC market was a small per cent of their total cash reserve. He noted that publicly traded companies had around 10 trillion in cash reserves, of which nearly 6 billion had been invested in Bitcoin. Therefore, out of the 41,000 publicly traded companies, less than two dozen had taken positions in BTC.

Germany to Permit Institutional Funds to Invest Billions in Crypto Assets for the First Time

The German administration is set to green-light legislation on Monday (August 2), which will permit institutional funds to invest as much as 20% in crypto assets like Bitcoin (BTC). This will be a significant step forward for the crypto space because it has never happened on German soil.

A boost to institutional investors

As per the announcement:

“A law taking effect on Monday will let so-called Spezialfonds with fixed investment rules put as much as 20% of their holdings in Bitcoin and other crypto assets. The funds, which can only be accessed by institutional investors such as pension companies and insurers, currently manage about 1.8 trillion euros ($2.1 trillion).”

Lawmakers across the globe have been giving crypto assets the cold shoulder. Therefore, this move by German legislatures marks a shift that will provide institutional investors with a boost.

Kamil Kaczmarski, a financial services adviser at Oliver Wyman LLC, expects the institutional funds to experiment with cryptocurrencies at a low level based on factors like volatility.

Eyeing crypto-investments

According to Tim Kreutzmann, a crypto expert at BVI:

“Institutional investors such as insurers have strict regulatory requirements for their investment strategies. On the other hand, they must also want to invest in crypto.”

Investment in the crypto ecosystem has emerged to be lucrative for various institutional investors. For instance, MicroStrategy, a leading business intelligence company, is not relenting in its quest to invest in the Bitcoin market amid holding 105,085 BTCs. The firm recently released its financial report for the second quarter of 2021 and stressed its commitment to deploy funds to invest in its “digital asset strategy.”

On the other hand, payment giant PayPal announced its intention to launch a crypto wallet in the third quarter this year.

Jan Wuestenfeld, an on-chain analyst, recently noted that a negative correlation between the dollar index (DXY) and Bitcoin could signal a return of institutional money in the BTC market.