Is Bitcoin’s price performance now dependent on institutional investors?
Just 48 hours after the influential crypto asset management firm opened its doors to new investors on 13 January, the bitcoin price has climbed by almost 20%, bringing it back to the US$40,000 mark.
Within this period, the asset management firm has purchased a further 4,618 BTC, equivalent to US$182 million. Last quarter, Grayscale had already added US$3.3 billion in BTC to its portfolio, bringing its total Bitcoin assets to US$27.6 billion.
However, Bitcoin is not the only cryptocurrency that has made Bitcoin Profit significant gains since 13 January, as can be seen from the fact that the crypto market has grown by US$137 billion in the last two days, bringing the total market capitalisation once again above the sound barrier of US$1 trillion. US dollars.
Grayscale’s purchases are seen as evidence of increased interest from institutional investors, as they do not invest directly in cryptocurrencies but through crypto-financial products such as wealth management. The interest of these investors is now so great that the available supply of bitcoin is experiencing a real shortage. Even the major trading platform eToro recorded liquidity shortages for its crypto trading yesterday.
Since the Bitcoin halving last year, which literally „halved“ the rate of increase in Bitcoin’s circulating supply, only 900 BTC per day are being mined. However, as the crypto market research institute Glassnode calculates, only a third of this has been flowing onto crypto exchanges since July 2020.
In the same period, Grayscale has bought up just under 224,390 Bitcoin, which corresponds to about 1,200 BTC per day. So the large crypto asset management company alone is already collecting more Bitcoin on behalf of its institutional clients than is being newly produced.
In the case of other cryptocurrencies, however, the influence of institutional investors does not yet seem to have as strong an impact on the price development as it does for Bitcoin. For example, although Grayscale’s Ethereum investment fund has shrunk by 6,036 Ether since 9 December, the price of the second-largest cryptocurrency has risen by more than 122% in this period, even without its support.