Grayscale increased its holdings of 9,503 BTC in a week, and institutional investors are expected to continue to push up prices
Original title: “Grayscale increases its holdings of 9,503 BTC a week, and institutional investors are “buying” to continue to push up prices”
Original author: NICK CHONG
In early May, Bitcoin experienced its third block reward halving. This event reduced the number of BTC issued per block by half, from 12.5 coins to 6.25, which means that the supply of Bitcoin is insufficient to meet demand.
Fortunately for buyers, as relative demand is increasing rapidly, this indicates that Bitcoin should continue to rise.
Institutions are snapping up bitcoin
According to Kevin Rooke, a technical data analyst, in the past few weeks, digital currency management company Grayscale Investments has witnessed the influx of Bitcoin investment activity.
Kevin’s analysis found that as of June 5th, the bitcoin holdings of the bitcoin trust (GBTC) of the crypto asset management company Grayscale Investment had increased by 28,413 bitcoins since the bitcoin halved. This week 9,503 Bitcoins were added. Since the halving, the number of newly mined bitcoins is only 19,200, and 6,863 bitcoins were newly produced this week. Grayscale purchased these bitcoins in response to customer demand for the Grayscale Bitcoin Trust. The product code is “GBTC” and investors can buy.
Cryptocurrency and technical data analyst Kevin Rooke gives Grayscale’s bitcoin accumulation map
The analyst thinks this situation is optimistic, because a bitcoin company’s customers absorb more bitcoins than the number of new coins minted every week.
By the way, Grayscale’s other flagship product, Grayscale Ethereum Trust (ETHE), has a similar trend.
A top industry analyst said on June 4 that the trust’s transaction price is $239.50 per share, which is more than 1000% higher than the price of ETH supporting the asset. This shows that retail and institutional purchases of ETH at a premium have a strong accumulated sentiment.
ETH price trend vs ETHE price trend
Follow in the footsteps of the fund tycoon
The proliferation of Grayscale customers’ bitcoin accumulation seems to be related to two things (at least one of them): 1) halving block rewards, or 2) fund tycoon Paul Tudor Jones.
Although Grayscale has seen a lot of capital inflows before, in the past month after halving and Paul Tudor Jones supporting BTC, things have really started to improve. It is not yet 100% clear which factor caused the increase in capital inflows in the cryptocurrency market. But in fact, these two events are closely connected.
In early May, the billionaire released a research report entitled “Big Currency Inflation”.
In the memo, the veteran of Wall Street explained why the ongoing recession caused by global diseases may cause the devaluation of fiat currencies.
He said that during these difficult times, Bitcoin was a way for him to hedge his portfolio. He explained that the halving events like May caused the scarcity of assets, making Bitcoin the “fastest horse” in the current asset battle.
The mainstream media has extensively reported on Paul Tudor Jones’ views, and some believe that this news has attracted institutional participants to the Bitcoin space.
Bitcoin ushers in a powerful catalyst
Institutional entry into the cryptocurrency space is expected to have a huge boost to this emerging market.
Mike McGlone, senior commodity strategist at Bloomberg, commented on the institutional investment of Bitcoin in the June cryptocurrency report:
“Despite the lack of US exchange-traded funds (ETFs), bitcoin exchange trading tools have shown greater buying and holding interest, thereby supporting prices. The largest gray-scale bitcoin trust (GBTC) is taking Absorb more and more supply, but its premium is still declining.”
McGlone added that this accumulation indicates that institutions are becoming “immersive buyers” of Bitcoin, which indicates that they believe the cryptocurrency has long-term potential.