Wednesday , November 25 2020

Institutional Money May Be Igniting the Current Bitcoin Rally, Crypto Coins News


  • There are several theories that can explain the current bitcoin pump.
  • The revelation that Grayscale raked in close to $ million in Q4 investments may explain why the cryptocurrency bottomed out in December.
  • New investments must keep flowing in or there’s a chance that BTC drops all the way down to $ 5, (******************************************************************************************.

Bitcoin recorded another fresh high Friday as it climbed to $ 9, (*****************************************************************************************. ********

There are different theories as to why the number one cryptocurrency suddenly came back to life. Just over a week ago,bitcoin rallied along with gold and oil after geopolitical risks in the Middle East escalated. Some analysts claim that speculators are already positioning for the May halving. Others claim that theloose monetary policies of central banks is driving investors to take on riskier assets.

A widely-followed bitcoin bull suggesting that the halving may be driving the rally. | Source:Twitter

While these theories have their own merit, new information tells me that institutional money may be powering bitcoin’s ascent.

Grayscale Investments Record Year May Have Sparked the Bitcoin Surge

In the fourth-quarter of (*********************************************************, the top cryptocurrency struggled to keep its head above water. From a high of $ (**************************************************************************, in October, it nosedived to $ 6, in December . At the time, the atmosphere was so pessimistic that calls for a drop to $ 5, 04 or lower were dime a dozen.

At the same time, however, Grayscale was raking in institutional money. Last year, the Grayscale Bitcoin Trust drove demand as institutions invested $ (******************************************************************. 4 million. Nearly

********************************** million were raised in

**********************Grayscale investments since | Source:Forbes

This new information tells me that institutional investors helpedcarve the bitcoin bottom in December. It is no coincidence that the orange coin bottomed out just as institutional money came pouring in.

Institutional Money Must Keep Coming or the Party Stops

$ million is a lot of money for an asset class with a market cap of about $ billion. The impact of institutional money is magnified if you consider that more than half of BTCs in circulation have not moved in a year. Only$ 46 billion worth of BTCs have been changing hands over the past 12 months.

************************************HODL is not just a meme. | Source:

The chart shows that (**************************************************************************% of the over**************************************************************** 06 million BTCs in circulation are dormant. Only 6. million BTCs are being used for trading or payments. These numbers indicate that the cryptocurrency is bound to soar if $ (million of new money enters the market.

While $ 350 million may be enough to carve a bottom, it’s not sufficient to push bitcoin to greater heights. Should the current bull rally fail to entice new investments, the coin will likely struggle to maintain its momentum. What’s even worse is that institutions might cash out just as new money from hyped retail traders enter the market.

If that happens, we might see bitcoin capitulate to $ 5, 04 as trapped retail money rush to exit the cryptocurrency.

Disclaimer: The above should not be considered trading advice from CCN. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.

This article was edited by Sam Bourgi

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