27 Jan 2023 Anthony Lehrman
Institutional Investors Are Buying Up Cryptos, Analyst Notes
According to the chief strategist of Matrixport, institutional investors are "not giving up on crypto," with recent statistics suggesting that they may be responsible for as much as 85% of Bitcoin purchases.
The fact that institutions are not "given up on crypto," according to Markus Thielen, head of research and strategy at the financial services company, suggests that the crypto sector may be entering a new "crypto bull market now.”
According to statistics from Matrixport published on Jan. 27, it is possible to determine if institutional or retail investors prefer a certain digital asset depending on whether it is performing well during American or Asian trading hours during the period.
According to the research, Bitcoin has increased in value by 40% so far this year, with 35% of those gains taking place during U.S. trading hours. This means that U.S.-based investors have made an "85% contribution," suggesting that American institutions are now buying Bitcoin. According to prior research, institutions often start by purchasing Bitcoin before making investments in other cryptocurrencies, Thielen continued.
“If history is any guide, then we should see the outperformance of layer 1 and altcoins relative to Bitcoin.” the analyst added.
Although the analysis showed that news about other projects, such as Lido DAO (LDO) and Aptos, had a favorable influence on token values, the cryptocurrency rally had not yet begun as of Jan. 12 when the U.S. inflation statistics were made public.
And while APT is working well 24/7, Ethereum (ETH) looks to be performing well during US hours, indicating "institutional flows" into the coin.
As institutional usage increases, the report concluded that this "should be a very good indication for Bitcoin."
Data also indicates that the Bitcoin surge to $23K wasn't enough for the world’s largest crypto traders to feel optimistic.
Meanwhile, economist Lyn Alden previously noted that Bitcoin is presently playing "a little catch-up," returning to where it would have been before the FTX crash.
Alden stated that there is a "serious risk ahead" for the second half of 2023, noting "excellent right now" liquidity levels as one important reason.
“Aptos is seeing a mix of strong returns during U.S. trading hours AND during Asia trading hours.”
According to Alden, when the U.S. Treasury reduces its cash position to keep the nation's debt levels low, "liquidity into the financial system" is being pushed.
TechDev, a well-known trader and market analyst, tweeted an update on January 26 that showed the price link between Bitcoin and gold and predicted that if the trend continued, Bitcoin may potentially "break the $50,000 level."
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