Bitcoin Rallies to $93,000 Driven by Institutional Investors
Bitcoin's price surge to $93,000 is primarily fueled by institutional investors rather than retail ETF buyers, according to Coinbase Institutional's John D’Agostino. Key points include:
- The rally began in early April as institutions and sovereign wealth funds accumulated BTC.
- Retail investors were withdrawing from spot ETFs during this period.
- A new bitcoin investment company, Twenty One Capital, was launched with backing from Tether, Bitfinex, and SoftBank, starting with over 42,000 BTC.
- D’Agostino outlines three reasons for the current market dynamics:
- De-dollarization: Reducing USD exposure due to weakening trade.
- Decoupling from technology trends: Bitcoin moving away from associations with tech stocks.
- Hedge basket theory: Bitcoin ranks highly in inflation hedge models among commodities traders.
- Bitcoin is trading based on its intrinsic qualities like scarcity and portability, similar to gold.
- Major altcoins such as ETH, SOL, and ADA have not seen comparable price movements, while the CoinDesk 20 index is down 3% over the past month.
- Recent price actions may have rekindled retail interest in BTC ETFs, with inflows exceeding $900 million for two consecutive days and $2.2 billion between April 21 and 23, despite earlier net outflows totaling approximately $1.21 billion.