News of institutions getting more involved in crypto appears to be pushing the bitcoin price to new heights.
Bitcoin Is Surging Unlike Any Other Asset
Things started out last month when it was announced that MicroStrategy had purchased roughly $400 million or more in bitcoin. From there, other companies began to follow suit. For example, Square – a digital payment firm – bought roughly $50 million worth of the world’s number one digital currency by market cap, while Stone Ridge also invested about $150 million in the currency.
During the time of MicroStrategy’s second buy, the price of bitcoin was hovering in the low to mid-$10,000 range. Now, the asset has shot up by more than $1,000, and the currency is trading for over $11,500. In addition, it looks like more people are beginning to hold onto their cryptocurrency, with bitcoin sales and trades plummeting to new lows on exchanges and trading platforms. Instead, people have been holding onto their tokens, with the amount of bitcoin over a year old being held having increased by roughly 63 percent since March of this year.
This makes sense considering everyone wants to have bitcoin around just in case the economy flatlines. People are worried that inflation and other harsh circumstances are about to set in, and thus they do not want their money to suffer and they are looking to keep their wealth hedged against any future problems. Bitcoin has become the ultimate tool for securing wealth during uncertain times.
In addition, many customers seem to be looking for yield opportunities in the Ethereum space. As it stands, there is about $1.5 billion worth of BTC stored away on the ETH blockchain. This is equal to about 133,915 separate units, nearly three quarters of the world’s total bitcoin supply. Thus BTC, while still the globe’s top cryptocurrency, has found a home in the domain of its primary competitor.
Things Should Stay Strong From Here
Crypto analyst Rekt Capital recently commented:
Last week’s candle close was an important first technical step that opened bitcoin up to testing higher resistance levels. Bitcoin has managed to stay within or above the $10,300 – $10,800 demand area for four consecutive months: a historical feat, further solidifying the psychological price level of $10,000. Over the years, this same area (green box) had figured as a point of strong rejection, with the sole exception being the exponential rally of late 2017. Going forward, bitcoin will soon attempt to breach a now three-month diagonal resistance (black line) as price rises towards the higher $11,000s. Breaking this trend line would likely be a bullish price development.
The volatility of the crypto space is unlikely to dissipate in the coming weeks, however, considering just how close we are to the U.S. presidential election, which in the past, has had a massive influence on the status and price of bitcoin.