Institutions Support Bitcoin Despite Its Ups and Downs
The bitcoin price is once again past the $19,000 mark, and it appears institutional investors continue to drive the gains that bitcoin has been enjoying over the past several weeks.
Institutional Traders Love Their BTC
We’ve all heard that the 2017 run and this run are completely different because the first was driven by retailers, whereas this one is being driven by professional traders that are looking for legitimate stakes in the crypto universe. Companies such as MicroStrategy have started a heavy trend of investing in bitcoin, and it seems many other enterprises are following in its footsteps.
The currency also appears more stable in the sense that while there have been occasional drops here and there, they haven’t lasted anywhere near as long as the ones that were incurred following the first run three years ago. If we remember correctly, 2018 has ultimately gone down in history as one of the worst years for bitcoin.
Following bitcoin reaching its all-time high in December of 2017, the next 11 months would see the currency traveling through the doldrums and eventually losing about 70 percent of its value in November of 2018, where the currency fell to about $3,500 per unit.
This time, small drops have happened, where bitcoin fell from around $19K into the high $17K range. There have been a few corrections, but they have been only temporary, with the asset later surging into extremely bullish territory and once again proving that its resilience, strength and newfound maturity aren’t flukes. The currency is once again doing quite well, and many analysts believe institutional support is to “blame.”
Tim Enneking – managing director of Digital Capital Management – recently commented in an interview:
There is a lot of space between $13.7K and $19.8K with little technical ammunition to determine support and resistance levels simply because, historically, the price has spent an immaterial amount of time in that range. Therefore, traders naturally gravitate towards numbers which end in a lot of zeros.
Amongst the latest institutional adoption taking place in the bitcoin and crypto arena involves MassMutual putting roughly $100 million from its general investment account into the world’s number one digital currency by market cap. The price jumps incurred by BTC have been so solid that they’ve even gotten some long-term bitcoin doubters to change their minds, with figures such as Ray Dalio – who has referred to bitcoin as a “bubble” in the past – recently saying:
I think that bitcoin and some other digital currencies have, over the last ten years, established themselves as interesting gold-like asset alternatives, with similarities and differences to gold and other limited-supply, mobile (unlike real estate) store holds of wealth.
More Interest Than Ever?
John Todaro – director of institutional research for Trade Block – also states:
Institutional investors and traders remain open and interested in bitcoin, arguably the most open they have been in the history of the asset.
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