According to Matrixport’s chief strategist, Institutional investors “are not abandoning cryptocurrencies,” with the latest data suggesting that up to 85% of bitcoin purchases come from US institutions.
Markus Thielen, the financial services firm’s head of research and strategy, told Cointelegraph that Evidence shows that institutions are not “giving up on crypto,” which is an indicator that we may be entering a new “crypto bull market.”
The data was shared in a January 27 report by Matrixport, which suggests that one can distinguish whether a digital asset is more favorably favored by retail or institutional investors at any given time based on whether that asset is doing well in the United States or Asian trading hours.
The report claimed that if an asset that trades 24 hours “performs well” during US trading hours, it indicates that it is being bought by US institutions, while an asset that experiences growth during Asian trading hours indicates that it is being bought by Asian retail investors.
The report cites that bitcoin (BTC) is up 40% this year, with 35% of those gains occurring during US trading hours, meaning that there is an “85% contribution” associated with US-based investors, indicating that US institutions are buying bitcoin right now.
Bitcoin Fear and Greed Index is 55 – Greed
Current price: $23,033 pic.twitter.com/OAt0TakkZR— Bitcoin Fear and Greed Index (@BitcoinFear) January 27, 2023
The Bitcoin Fear and Greed Index is 55: Greed. Current price: USD 23,033
Thielen added that previous data shows that institutions typically start buying bitcoin first before investing in other cryptocurrencies. He pointed:
“If history is any guide, we should see layer 1 and altcoins outperform relative to bitcoin.”
Although the report highlighted that news about other projects had a positive impact on token prices, such as Lido DAO (LDO) and Aptos (APT), the cryptocurrency rally did not begin until the US inflation data was released on January 12.
It was also mentioned that Ether (ETH) appears to be doing well during US hours, indicating “institutional flows” in the cryptocurrency; however, APT is doing well.
“Aptos is seeing a mix of strong returns during US trading hours and Asian trading hours.”
The report concluded that this “should be a very positive sign for bitcoin.” as institutional adoption continues.
In earlier comments to Cointelegraph, Economist Lyn Alden said she thinks bitcoin is playing “a bit of catch up,” getting back to where it would have been without the FTX crash.
Alden warned that there is “considerable danger ahead” for the second half of 2023; he cited liquidity conditions as an important factorwhich are “good right now”, partly because of the United States.
#Bitcoin is a Masterpiece. pic.twitter.com/2rhnCYlkW1
—Michael Saylor⚡️ (@saylor) January 25, 2023
Bitcoin is a masterpiece.
Alden explained that as the US Treasury is reducing its cash balance to keep the country’s debt levels low, it injects “liquidity into the financial system.”
Meanwhile, popular trader and market commentator TechDev posted a Twitter update on Jan. 26 showing the price correlation between bitcoin and gold, stating that if bitcoin continues to follow the price of gold, it could even “break above the $50,000 mark.”
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