Recent data showing institutional purchases of the flagship digital asset indicates that institutional investors in the United States are still bullish on cryptocurrency. The data from Matrixport shows that American institutional players account for 85% of Bitcoin buying.
Institutional Bullish Stance on Crypto
According to the lead researcher at the crypto trading platform, Matrixport, Markus Thielen, there is evidence to show that institutional players aren’t giving up on digital currency yet. The analyst noted that this might indicate a possible crypto bull rally in the future.
Data from the financial services firm suggested that the company can differentiate whether a digital asset is more favorable to retail or institutions at a given time based on the asset’s performance in the United States.
According to the Matrixport report, if a particular asset’s 24 hours trades are in the green during the US trading hours, American institutional players are accumulating that asset. Similarly, if an asset witnessed growth during Asian trading hours, it indicates Asian retail investors buying the token.
The report cited Bitcoin’s surge at the start of the year, stating that the leading crypto asset has seen a 40% rise, with 35% occurring during US trading hours. It shows that American institutional investors were responsible for 85% of BTC’s overall purchase.
Thielen noted that the previous data revealed that firms typically began buying Bitcoin before investing in other crypto assets. The report also highlighted the contribution of other projects to the surge in the price of tokens, like Lido’s LDO and Aptos’ APT.
The crypto market rally started taking shape after the release of the US inflation data on January 12. In addition, the Matrixport research mentioned Ether as one of the crypto tokens that perform well during US trading hours.
Thus, indicating inflows from prominent players into the crypto ecosystem. In its conclusion, the study disclosed that this signifies a positive price pattern for Bitcoin amidst rising institutional adoption.
A Possible Danger
In a recent comment on BTC’s price, economist Lyn Alden noted that the token is already playing a catch-up game. She claimed that Bitcoin would have returned to the forecasted range had the FTX implosion not occurred.
The economist warned that the second half of 2023 will present another challenge to the industry. However, she added that the liquidity conditions would be slightly stable due to the influence of the United States.
The Federal Reserve has been busy conducting quantitative tightening (QA) to remove liquidity from the economy and curb inflation since last year. Yet, domestic politics in the US has mitigated the Fed’s move.
Nevertheless, Alden believes that it is only a matter of time before the Fed resumes aggressive rate hikes, as seen during the 2022 Bitcoin bear market. Meanwhile, Alden is confident that Bitcoin will recover from its recent lows in the long term.