Bitcoin price has more than tripled after imploding in March. The flagship cryptocurrency has retaken the $11,000 threshold at the back of renewed investor interest. The surge in price has coincided with a decline in Bitcoin balances held in major crypto exchanges.
Bitcoin Strong demand
Bitcoin balances in crypto exchanges have dropped to levels not seen in a year as people resort to holding on to their holdings in anticipation of a further spike in BTC price. As of July 29, only 2.64 million BTC was held by exchanges as BTC price continued to climb the ladder.
A decline in BTC balances in crypto exchanges, affirms the fact that the flagship cryptocurrency has become an ideal investment tool for most people. People are increasingly withdrawing their BTC from the exchanges, all in the effort of controlling their private keys.
Selling pressure around the flagship cryptocurrency has declined significantly, as most estimates now indicate the cryptocurrency has what it takes to continue edging higher. Likewise, people are looking to offload their holdings once the price rises significantly back to record highs.
A spike in Tether USDT inflows into crypto exchanges is already fuelling suggestions that more people on the sidelines are waiting for opportunities to buy BTC in anticipation of price edging higher. The buying spree does not come as a surprise as Bitcoin has evolved to become a unique store of value in the capital markets.
The cryptocurrency is increasingly taking on the likes of gold and the U.S dollar as an alternative investment tool in times of crisis. As the COVID-19 pandemic forces people to scamper for safety into safe-havens, some people have opted to diversify and hedge their positions using Bitcoin. In addition to the COVID-19 pandemic, investors are also shunning the stock market in favor of Bitcoin as most equities are trading at over-inflated levels.
High Institutional And Retail Interest
Likewise, institutional and retail interest in Bitcoin has increased significantly as adoption into the mainstream financial sector continues to gather steam. Bakkt and CME Futures have already printed record numbers of Bitcoin trading volume and open interest, indicating that institutional and retail investors are increasingly eyeing opportunities around the cryptocurrency.
Bakkt, which specializes in Bitcoin futures with physical delivery printed record numbers of Bitcoin contracts at 11,506, believed to have contributed to a spike in Bitcoin price to the $11,400 level. CME institutional exchange, on its part, has registered a 55% increase in daily trading volume to $1.32 billion.
Grayscale, on its part, has recorded another $1 billion in new funds over the past 11 days, underscoring strong Bitcoin investment interest. Leading Bitcoin Options exchange Derbit has already printed record volumes of $527 million, affirming keen Bitcoin interest in the retail market.
A spike in trading volume might as well signal that the bullish momentum remains intact and that Bitcoin is poised for another bull run after touching the $11,000 level. While Bitcoin did touch record highs of $20,000 in 2017, there is already talk the current bullish momentum could push the cryptocurrency to new heights. According to Gemini Founder Cameron Winklevoss, the ongoing Bitcoin Bull Run will be dramatically different and more significant.
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