It is now assumed that the Bitcoin market is being closely monitored by a growing number of institutional investors.

This is what the CTO of Bitfinex Paolo Ardoino claims, according to whom there are still many institutional investors who have not yet entered this market, and who are watching it precisely to decide how to move.

Ardoino stated: 

“Turbulent cryptocurrency markets have left traders guessing at what the next price move will be. Bitcoin’s every move is now being carefully watched by a growing audience of institutional investors still trying to grapple with the possibilities of an asset that only a decade earlier was the preserve of a small band of technologists. As bitcoin captivates, the future gets brighter still for all those holding the new digital gold”.

This scenario posits a growing market demand for BTC, while another indicates a shrinking supply. 

80% of Bitcoin off the market

Melis reveals on Twitter that almost 80% of all existing BTC would be out of the market at this time

The chart comparing the volumes of liquid BTC with illiquid BTC, i.e. those that are held in the wallet without being used, reveals that only about 3 million BTC out of 18.5 million are highly liquid, i.e. traded regularly on exchanges, with about 1 million liquid BTC, and the remaining 14.5 million illiquid. 

Furthermore, until the beginning of 2020, the volume of liquid BTC was increasing, but over the past year the trend has reversed, and they are now decreasing. 

It is enough to think that a year ago there were about 3.5 million highly liquid bitcoin, with almost 1.5 million liquid BTC, and only just over 13 million illiquid BTC. In other words, illiquid bitcoin have increased by more than 10% in the last twelve months. 

If this trend continues, a further price increase is expected

For example, according to Pantera Capital, the price of bitcoin could increase by more than 200% over the next eight months, and reach $115,000 by August 2021. However, it also argues that the 2021 rally could be different than the 2017 rally. 

Pantera founder and CEO Dan Morehead said: 

“The picture for crypto is just so strong right now. Six or so months ago, Bitcoin’s market cap was the same as L’Oreal Cosmetics, it’s now past Facebook, and that is just a huge difference in how the market perceives Bitcoin”.

Pantera co-CIO Joey Krug added. 

“It’s pretty different than in 2017. The high level fundamentals for 2017 was that there really wasn’t much fundamentals at all, most projects were just an idea on a piece of paper, most things hadn’t launched, most things didn’t have live products”.

The scenario has therefore changed a lot compared to four years ago, both within the crypto sector and on the global financial landscape in general. However, the underlying dynamic that drives bitcoin’s price up, as demand increases and as its supply is inelastic to the market, remains, and will remain forever.




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Bitcoin market observed by institutional investors

by Matt Villie
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