Does Bitcoin’s price development now depend on institutional investors?
Just 48 hours after the influential crypto wealth management company opened its doors to new investors on January 13th, the Bitcoin price climbed by almost 20%, bringing it back to the 40,000 US dollar mark.
During this period, the asset management company purchased an additional 4,618 BTC, which is the equivalent of $ 182 million
Last quarter, Grayscale had already added $ 3.3 billion in BTC to its portfolio , bringing its total Bitcoin fortune to $ 27.6 billion.
Bitcoin, however, is not the only cryptocurrency that has risen significantly again since January 13th, which can be seen from the fact that the crypto market has grown by 137 billion US dollars in the last two days , bringing the total market capitalization again the Sound barrier of 1 bio. US dollar has cracked.
The purchases by Grayscale are proof of the increased interest from institutional investors, as they do not invest directly in cryptocurrencies, but rather through crypto financial products such as asset management. The interest of these investors is now so great that the available supply of Bitcoin is experiencing a veritable shortage.
Even the large trading platform eToro recorded liquidity bottlenecks for its crypto trading yesterday
Since the Bitcoin halving last year, when the rate of increase in the amount of Bitcoin in circulation was literally „halved“, only 900 BTC have been mined per day. As the crypto market research institute Glassnode calculates, only a third of this has been flowing to crypto exchanges since July 2020.
In the same period, Grayscale bought just under 224,390 Bitcoin, which is roughly 1,200 BTC per day. The large crypto asset management alone is collecting more Bitcoin than is being produced on behalf of its institutional customers.
In the case of other cryptocurrencies, however, the influence of institutional investors does not yet seem to have as much impact on the price development as it does with Bitcoin. Grayscale’s Ethereum investment fund has shrunk by 6,036 ethers since December 9, but the price of the second largest crypto currency has increased by more than 122% in this period even without its support.