Institutional Investors Are Already Flooding The Bitcoin Market
Many believe that institutional investment is going to be the driving force for the next Bitcoin bull run, pushing Bitcoin to a new ATH. The general consensus is that this will be encouraged by the acceptance of a Bitcoin ETF application, such as those that are currently in the works at the United States SEC.
On the other hand, some also believe that new projects like Bakkt could well inspire institutional investment to the level that it needs to be to initiate another Bitcoin rally.
However, according to new research, it actually looks as if institutional investment is already dominating, so why hasnât Bitcoin reached $20,000.00 yet?
Over the Counter trading
Over the counter trading, or OTC occurs when high-net-worth individuals are buying into cryptocurrency, By having such value, these individuals are assumed to be a part of institutions. By looking at OTC trading figures, we can already see a huge level of interest in Bitcoin from these high value investors, therefore many have deduced that as a result of this, institutional investment is already rife within the Bitcoin markets.
According to Cryptoglobe:
âBloomberg reports that in April, daily OTC trades varied anywhere between $250 million and $30 billion, while exchanges only handled about $15 billion daily in that time by contrast. Corroborating this, Circle Financial CEO Jeremy Allaire confirmed that his company is seeing a triple-digit increase in OTC volumes. By contrast, according to data from CryptoCompare, exchange trade volumes are down 80 percent from their peaks at the same time as the increasing popularity of OTC.â
Just within this timeframe, OTC trades far outweigh the trades handled by traditional exchanges by volume. This, as you may deduce does suggest that in April along, a huge amount of institutional investment took place.
So, back to the big question, why hasnât this inspired a Bitcoin rally?
Because Bitcoin is still unregulated and because we donât have a working ETF or something similar, institutional interest has no doubt been limited to a select few institutions. Institutional interest is not widespread enough to actually have a huge impact on the value of Bitcoin. Yes, these findings do prove that high value investors are buying in, but until we get large institutions buying Bitcoin and then publicising the fact they are buying it, the markets will remain steady. For an institutional investment based bull run to take place, we need big institutions to go on and advertise the fact that they are investing.
After this, things are sure to change.