• Bitcoin is currently trading at levels not seen for the past few months, and institutional investors are placing substantial bets on it.
• The Basel Committee of the BIS estimates that global banks currently own over $9 billion in cryptocurrency, with Bitcoin and derivatives based on it accounting for 56% of the total.
• History has shown that bull runs in the price of Bitcoin typically last four years, and some scholars believe 2023 might mark the start of the accumulation phase.
The world of cryptocurrency has been abuzz with activity in recent weeks, with Bitcoin leading the way. After a period of prolonged selling pressure, the king coin has been slowly regaining its footing and is currently trading at levels not seen for the past few months. This resurgence of demand has been driven in part by institutional investors placing substantial bets on the cryptocurrency.
Recent reports by the Basel Committee of the Bank for International Settlements (BIS) estimates that global banks currently own over $9 billion in cryptocurrency, with Bitcoin and derivatives based on it accounting for 56% of the total. This shift in institutional investor behaviour is being spearheaded by the likes of Michael Saylor, co-founder of MicroStrategy, who holds approximately 130,000 BTC, or 0.62% of the 19 million Bitcoin currently in circulation.
The bullish outlook for Bitcoin is further bolstered by historical data, which shows that bull runs in the price of the cryptocurrency typically last for four years. This cycle is usually followed by the accumulation of Bitcoin, which is then followed by an uptrend, selling or distribution of the cryptocurrency, and finally a downtrend. Some scholars believe that 2023 might mark the start of the accumulation phase, which could result in a surge in prices.
Moreover, in an environment where economic news has prompted investors to reevaluate their assumptions that the Federal Reserve would switch to a more dovish monetary policy any time soon, Bitcoin serves as a form of protection, allowing them to hedge against possible losses in U.S. stocks. According to Bloomberg strategist Mike McGlone, the Fed’s interest rate negotiations will heavily influence the price of Bitcoin, which could be beneficial to those who have already invested in it.
In conclusion, Bitcoin continues to draw institutional investors more than any other cryptocurrency, and its recent price recovery suggests that the market is heading in a positive direction. With a bullish outlook from the likes of Michael Saylor and historical data indicating a four-year bull run, it is likely that 2023 will mark the start of the accumulation phase of the cryptocurrency. Additionally, the Fed’s interest rate negotiations will have a direct impact on the price of Bitcoin, making it an attractive investment for those looking to hedge against losses in U.S. stocks.