Institutional Players Ramp Up Bitcoin Purchases
Despite the crypto winter that had many doubting the market, it appears institutional investors are back in the game, with a whopping 85% of recent Bitcoin trades attributed to American institutions. Markus Thielen, the head honcho of research and strategy at Matrixport, recently shared insights that indicate institutions are far from throwing in the towel on crypto.
Reading the Crypto Waters
According to a report from Matrixport, distinguishing between retail and institutional investors can be a simple matter of watching trading hours. If Bitcoin is thriving during U.S. trading hours, it’s a pretty good sign that institutional money is flowing. Conversely, if it’s dancing during Asian hours, you might be looking at retail enthusiasm. This year alone, Bitcoin has surged 40%, with a notable 35% of those gains popping up during U.S. hours—hello, institutional buying!
The Impact of Institutional Buying
Thielen pointed out that historically, institutions tend to dip their toes in Bitcoin before diversifying into altcoins. He predicts that if history holds, we could soon witness altcoins and other layer 1 tokens outperforming Bitcoin. It seems that if Bitcoin is smelling the institutional love, then other projects are waiting in the wings.
Interestingly, while Bitcoin is basking in the institutional spotlight, other cryptocurrencies like Lido DAO (LDO) and Aptos (APT) are also gaining traction due to positive news cycles. As the crypto landscape shifts, keep an eye on these players, they might just steal the show!
The Timing of the Rally
The crypto rally’s ignition point appears to be the release of U.S. inflation data on January 12. Thielen notes that not only is Bitcoin benefiting, but Ethereum is also showcasing strength during U.S. trading hours, signaling a wave of institutional interest. And, oh boy, APT seems to be winning both day and night!
The Glass Half Full or Half Empty?
Economist Lyn Alden warns that there’s a roller-coaster ahead for 2023, despite the current bullish momentum. With liquidity conditions looking decent thanks to the U.S. Treasury’s financial gymnastics, Alden hints at potential turbulence down the line. Funny how financial gymnastics often lead to market flips.
In the meantime, popular trader TechDev draws comparisons between Bitcoin and gold. If Bitcoin continues mimicking gold’s price trajectory, we might just be eyeing a potential leap toward the $50,000 mark. Who said history doesn’t repeat itself?
