Summary
- Institutions are continuing to purchase BTC. More individuals are likely to hold on to their BTC assets.
- Firms are increasingly interested in the market capitalization, adoption rates, and regulatory status of Bitcoin and not just its price movements.
Bitcoin hit the $1 trillion market capitalization for the second time in under a month, after rising 7% within 24 hours. The latest rise saw the cryptocurrency trading at $54,348, which was still below the all-time high of $58,322 set in February. The latest BTC breakthrough has unfolded at a time when the global crypto-market is undergoing consolidation after the recent market rally.
Bitcoin’s upsurge is largely attributable to growing institutional acquisitions and individual investors who have held onto their assets, defying some analysts’ expectations of widespread sales during the market correction.
Rising institutional acquisitions to propel current price rise
Back in February, Tesla set the stage for large-scale institutional acquisitions of BTC, and Elon Musk has since remained bullish about the $1.5 billion investment. While more purchases of that magnitude have not been forthcoming, institutions have been under pressure to diversify their balance sheets with cryptocurrencies, and BTC has been of particular interest. Firms like MicroStrategy and Square are among firms that have been steadily increasing their BTC inventory.
Also, institutions are embracing Bitcoin as a mode of payment, with BTC recently being adopted by Skrill and Paypal in the process of acquiring a crypto-start up for a price rumored to be $500 million. With such moves, it’s almost certain that more institutions are jostling to adopt BTC.
Going forward, most institutions are focusing more on the adoption rates, regulatory status, and the market capitalization of BTC as opposed to its price trends.
Recently, NYDIG, a Bitcoin custody and trading provider, solicited for about $200 million. This money was raised from different institutions like Morgan Stanley, Soros Fund Management, and MassMutual. Robert Gutmann, the CEO of NYDIG, revealed that these firms were more than institutional investors and that they would also be partnering in activities related to BTC.
A holding firm in Norway, Aker, has currently initiated a BTC investment company. The firm announced the launch of Seetee, the BTC investment company, via a letter to its stakeholders. This new company will enable Aker to invest in projects that are within the ecosystem of Bitcoin. Seetee will utilize Bitcoin as its primary treasury asset.
In Canada, the regulators have given the green light to CI Financial’s Bitcoin ETF. CI Galaxy Bitcoin ETF is set to begin trading today on the Stock Exchange of Toronto, with Galaxy DigitaL acting as a sub-advisor.
Additionally, the Government of the United States is currently planning to auction a small amount of BTC. The auction set for next week is for 0.7501 Bitcoin with a starting bid of $25,000.
The official launch of BCMG Genesis Bitcoin Fund-I (BGBF-I) has taken place today. The fund was initiated as an outcome of the increasing demand for institutional crypto outputs in regions in South Asia.
The recent developments discussed above show that institutions, while still cautiously embracing BTC, are much more aggressive and optimistic about its potential returns. This will provide great impetus to propel BTC prices higher.
BTC/USD technical outlook
The BTC price has broken through its resistance level, which was around $52,000. The price of this digital asset is currently at $53,780. It will find support at $53,000 and meet the first resistance at $54,710. With bulls likely to take strong charge, BTC is expected to keep on rising and potentially reach a new record-high price above $60,000.
The Relative Strength Index (RSI) of the BTC/USD pair is bullish. The RSI has passed the midpoint, pointing to the fact that the bulls are currently in charge.
