Many people who expected a possible Bitcoin correction after it once again hit its All Time High yesterday on Christmas Day, repeating the same pattern as the last 2017-18 bull run, were surprised today with Bitcoin firing up again reaching its new All Time High with the incredible $ 26,930.00 mark.
The probable reason for this rise in the price of Bitcoin, different from what happened in the last cycle is the entry of Hedges Funds and Institutional Players in the market. According to the date collected and presented by the futures trading exchange Bybit reveals that Grayscale had 576,650 Bitcoins in its possession on December 21, 2020, and that in just one day its balance increased to 588,970. According to what was presented, it is estimated that in just one day Grayscale bought 12,230 Bitcoins. Grayscale’s recent purchase equates to a 13-day supply of newly mined Bitcoin since the number of Bitcoin being added daily to the total circulating supply is 900 or $21 million. The latest purchase of the world’s leading digital asset is worth just over $290 million.
The nine-figure sum Grayscale just spent to purchase BTC is nearly 10 times the average amount the digital asset manager was spending per week in the first quarter of the year on the flagship cryptocurrency.
Grayscale Investments’ managing director, Michael Sonnenshein, discloses to CNBC in an interview that their Bitcoin purchases have increased sixfold year-over-year. He said:
“At Grayscale, our flows are now probably up 6X what they were last year. And the types of investors that are putting capital to work are unlike any of the investors we have seen ever before. It’s some of the world’s largest investors and the allocations that they are making are bigger than we’ve ever seen before.”
He also said why he believes this bull run will be different from the last one in 2017;
“I think this is a very different scenario than we were in in 2017. Back then, Bitcoin didn’t break that psychologically important $20,000 mark. And it’s really not surprising to us that it has this year. There really are a couple of important factors at play that weren’t here in the 2017 rally. And it’s investment banks writing research highlighting Bitcoin’s superiority to gold. You guys have seen prominent investors coming out and supporting this asset class. You have corporations adding Bitcoin to their balance sheets. These are not factors at play that we have seen before for this asset.”
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