Bitcoin is exploding. Various reasons are behind this surge and it is not clear to pinpoint the major catalyst of this price action. However, some analysts believe that BTC’s rise to multi-month highs could be a result of a significant surge in institutional activity in the past year. That is according to a report broadcast on CNBC television posted on June 25.
Data from an affiliate of Genesis Global Trading, institutional crypto lender Genesis Capital, reportedly confirms the investors’ uptick in cryptocurrency. The same data shows that the institutional volumes are two to three times higher than they were a year ago.
Although many attribute BTC’s strong price performance to market sentiment boosted by the recent unveiling of Facebook’s Libra, Bitcoin was already 140% up on the year before that publication. These high gains have made many analysts conclude that institution-led momentum is responsible for Bitcoin dominance.
Furthermore, an increase in geopolitical tensions could be enhancing interest in non-sovereign cryptos like Bitcoin. Some of the tensions include the increasingly hawkish exchanges between Iran and President Trump and the persistent United States-China trade war.
Although BTC’s popularity currently as a speculative apparatus and store of value generates comparison with gold, others think otherwise. CNBC cited an anonymous portfolio manager who allegedly said that the main relationship between the two assets is:
“…less about the correlation and more about investors trying to diversify smaller parts of their portfolio into other assets.”
Bitcoin Could Soar Higher
As the market continues to listen to the bulls bellowing, with bitcoin up a further 12% at some point today to flirt with $13,000, critical events lie ahead. For instance, the forthcoming U.S. House Financial Services Committee Hearing on Facebook’s Libra set for July 17, is a key event. Everybody interested in following the developments in the crypto space should follow the proceedings of that event keenly.
As reported on June 26, bitcoin has now surpassed the market dominance above 60% for the first time since April 2017. Trace Mayer, a Bitcoin Knowledge podcast host, has alleged that the coin’s current trajectory favors a year-end bitcoin price of around $21,000. The host cited readings of a technical price metric that divides the asset’s current price by its 200-day moving average.
For now, everything is green in most of the crypto markets. How long will the upward trend hold? Only time has the answer.