Analysts say that Bitcoin (BTC) continues to grow largely driven by institutions, with indicators such as open interest in CME and Grayscale Assets Under Management (AUM) confirming this narrative.
Meanwhile, the gold market has had a large outflow in recent weeks. On November 24, independent financial researcher Ian Newvenhays reported that gold experienced the largest weekly outflow in history.
The time of high churn from the gold market is remarkable as it comes after large institutional investors enter the bitcoin market.
Cointelegraph reports that Guggenheim Partners, which manages $ 275 billion in assets, is the latest organization interested in Bitcoin.
What does this mean for Bitcoin?
In the medium to long term, institutional capital inflows into Bitcoin can lead to two main directions.
First, Bitcoin may see a more persistent bullish trend that has emerged since September. Institutions, especially those that gain access to BTC through the Grayscale Bitcoin Trust, are likely to combine BTC with a long-term strategy.
Some long-standing bitcoin investors who have held positions in gold for a long time have also started investing fully in BTC. Raul Pal, CEO of Real Vision Group, said:
Well, the last bomb – tomorrow I have a sales order to sell all my gold and expand it to buy BTC and ETH (80/20). I have nothing else (other than some bond requirements and some dollars). 98% of my floating net asset value. You see, you can not rate me, but #responsible long. Good night everyone. ”
Second, fund managers say this could make Bitcoin more dominant in the cryptocurrency market. Bitcoin’s market value is currently 63.83% of the value of the global cryptocurrency market.
Bitcoin dominance index. Source: Coinmarketcap
Kyle Davis, co-founder of Three Arrows Capital, one of the largest funds in the cryptocurrency sector, said:
“No one is going to buy gold -> BTC dollars -> options. This year has seen a significant influx of net worth from USD or gold to BTC. This is not retail. These guys are not going to worry. ”
The immediate direction for BTC is still uncertain
Bitcoin has experienced strong gains in the last three months with little or no change.
It is not uncommon to see BTC plunge 30% during previous bull cycles, and recent gains continue to show a large retreat. In the short term, however, network analysts say Bitcoin can prepare for an even bigger dip.
This means that all exchanges go to bitcoins. Source: CryptoQuant
Ki Yong Joo, CEO of CryptoQuant, said that whales hold more BTC on stock exchanges than in recent months. This may indicate that whales may sell more bitcoins in the foreseeable future. He said:
“The fact that whales do not withdraw money means that dollar bitcoins are available for sale. If whales think the price will rise, they will spend a lot of BTC. I do not know when it will start, but if the price falls, the whales will react to the price and give high volatility. ”
Whether buyer demand from institutions and their TWAP algorithms from whale sellers is likely to determine the short-term price cycle for BTC.