[ad_1]
The ongoing Bitcoin (BTC) rally has been driven primarily by institutions, analysts say, with metrics like CME’s open interest and Grayscale’s assets under management (AUM), supporting this narrative.
At the same time, the gold market has seen large outflows in recent weeks. On November 24, independent financial researcher Jan Nieuwenhuijs reported that gold saw its largest weekly outflow in history.
The largest outflow of gold ever. pic.twitter.com/Re4o3PHrel
– Jan Nieuwenhuijs (@JanGold_) November 23, 2020
The timing of the increase in the level of outflows from the gold market is noteworthy because it comes after the entry of major institutional investors into the Bitcoin market.
Cointelegraph reported that Guggenheim Partners, which manages $ 275 billion in assets, is the latest institution to show interest in Bitcoin.
What does this mean for Bitcoin?
In the medium to long term, the inflow of institutional capital into Bitcoin could lead to two key trends.
First, Bitcoin could see a more sustained uptrend that has emerged since September. Institutions, especially those that gain exposure to BTC through the Grayscale Bitcoin Trust, are likely accumulating BTC with a long-term strategy.
Some longtime Bitcoin investors who held gold positions for extended periods have also begun to fully allocate their capital to BTC. Raoul Pal, CEO of Real Vision Group, She said:
“Ok, last bomb – I have a sell order tomorrow to sell all my gold and raise to buy BTC and ETH (80/20). I own nothing else (except some bonds and some $). 98% of mine Liquid equity. See, you can’t rate me except #irresponsablylong Good night all. “
Second, fund managers say this could make Bitcoin even more dominant in the cryptocurrency market. Currently, the market capitalization of Bitcoin represents 63.83% of the valuation of the global cryptocurrency market.
Kyle Davies, the co-founder of Three Arrows Capital, one of the largest funds in the cryptocurrency industry, She said:
“Nobody gets gold -> $ BTC -> alts This year has seen large inflows of equity from USD or gold to BTC. This isn’t retail. These guys aren’t going into ripples.”
BTC’s short-term trend remains uncertain
Bitcoin has seen strong momentum over the past three months, barely recording major corrections.
During previous bullish cycles, it is not uncommon for BTC to have experienced a 30% pullback, and the recent run has yet to experience a severe recession. But, in the short term, on-chain analysts say BTC could be prepared for a deeper drop.
Ki Young Ju, CEO of CryptoQuant, said whales keep more BTC in exchanges than in recent months. This could indicate that the whales may be selling more BTC in the near future. He She said:
“The fact that the whales are not retiring means that $ BTC is available for sale. If the whales think the price will rise, they will withdraw a lot of $ BTC. I don’t know when it will start, but if the price goes down, the whales will react to the price and have high volatility. “
If buyer demand from institutions and their time-weighted average price (TWAP) algorithms would counter the selling pressure of the whales, it will likely drive BTC’s short-term price cycle.
[ad_2]Source link
