BTC surge fuelled by financial institutions and top U.S. firms

26 Nov 2020

Demand from financial institutions and publicly listed firms are behind Bitcoin’s re-test of its record highs, says crypto analysts.

Nick Cote of gamified trading platform Hxro Labs stated: “The primary reason for the steady grind up in Bitcoin has been the increased interest and aggressive buying activity from institutions.
“A lot of investors are going through Grayscale.”

Mounting institutional demand is seen in the rise in Grayscale’s Bitcoin Trust, with more than 500,000 in Bitcoin holdings.

Cote added that major U.S. firms including Square and Microstrategy are “putting BTC on their books as a hedge against inflation and poor monetary policy management from the central banks.”
He added this is fuelling a “positive feedback loop” in the markets: “There will be pullbacks of course, but as long as institutions believe in the narrative of Bitcoin being used as a store of value or hedge against inflation, it becomes a positive feedback loop.”
This was a view echoed by NEM head of trading Nicholas Pelecanos, who said Bitcoin’s fundamentals are now stronger than ever, indicating post-halving supply dynamics, increasing institutional adoption, and a number of “publicly listed U.S. companies moving 10% of their balance sheet into the asset,· Cointelegraph reports.
Pelecanos now believes there will be a rise in the altcoin markets: “BTC is back at its all-time high levels, but what is worth noting is the valuation of the altcoins which are on average still 50% below their all-time highs.”

However, Pelecanos added: “Some altcoins represent projects that are no longer functioning, yet other projects have seen tremendous development on both adoption and tech.”
Furthermore, crypto analysts have also referred to bullish signs stemming from the mining markets. According to Rafael Schultze-Kraft, chief technical officer of Glassnode, miners have hoarded an additional 10,000 Bitcoin since March.

Miners’ revenues also posted new year-to-date highs recently, with daily revenue surpassing $20 million.

In addition, last month, on news that PayPal was allowing customers to buy, sell and hold Bitcoin, deVere founder and CEO Nigel Green stated: “I believe Paypal’s decision will drive more institutional investors into the already burgeoning crypto sector, bringing with them their capital and expertise.

“The direction of travel has already been on this path, but there is a growing sense that more investors will now be preparing to move off the sidelines.” 

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