Bitcoin Price Surge Could be a Sign That Institutions are FOMOing
Now the bitcoin price surge just a scramble for funds of institutions, a real surge will definitely start when individuals are FOMOing.
Bitcoin hit several key points after breaking through $10,000 on 21 January, and today reached $13,000 in the early morning. The ongoing rise is impressive. But we wonder who is buying up bitcoin.
Now crypto market is totally different from that of in 2017. Prices are no longer driven by high speculative sentiment among individual investors. More and more evidence shows that institutional investors have become the main force in this bull market, and their demand for Bitcoin is increasing. Institutional firms are accumulating more massive BTC deposits by the day and have become the primary driving force behind the current BTC price hike. GBTC, for instance, is eligible for a few IRA accounts, and its shares are the premier publicly quoted securities that derive all of their value from Bitcoin’s price.
Through GBTC’s shares, investors can dip their toes in Bitcoin trading through a trusty legacy investment vehicle. The simple market mechanism of the GBTC security eliminates the need for management of private keys, the purchase or the storage of it. The fact that the security can be held in particular brokerage and IRA accounts may be the push behind its high demand. The insatiable demand for Bitcoin by institutions has skyrocketed, that it is estimated that whales are now Holding at least $6 billion in BTC more than they had in August 2018.
“Grayscale Bitcoin Trust accumulated 11,236 BTC in April alone. Currently, 54,000 Bitcoin is mined per month. Right now, they are buying up 21 percent of the new supply of Bitcoin. In a year, the halvening will double that number to 42 percent of the supply. Institutions are FOMOing.”
GBTC provides institutional investors with the opportunity to buy Bitcoin by using traditional investment tools. It is called the first listed securities to obtain value from the price of Bitcoin.
By June 24, the bitcoin transaction price in GBTC was $14.64, compared with Bitcoin price of $14,640, a premium of about 30% over the mainstream crypto exchange. This means that when trading in GBTC, investors have to pay 30% higher than the market price. Premium purchasing demonstrates the determination of institutional investors and positive expectations of the crypto market.
Monthly increase of GBT’s assets indicates institutional investors’ interest in bitcoin
Bitcoin has features of transparency, immutability, global mobility. It is very suitable for long-term portfolio. These features are also increasingly recognized by institutional investors.
Bitcoin is up nearly three times a year. Bitcoin reached an all-time high of nearly $20,000 in 2017, nearly 10 times higher than its current low. It is estimated that the price of Bitcoin will surging more this year.Now the surging price is driven by institutional investors, we believe the next bull market may be much larger than any of the last few years after individual investors flood in.