Bitcoin has shown significant growth in February, with a remarkable increase in value of over $18,000 in just one month. This positive momentum has carried on into March, as the price of Bitcoin has now exceeded the $65,000 mark for the first time since 2021. Analysts and experts are optimistic about the future performance of Bitcoin, with expectations of reaching another all-time high in the near future.
According to a report by Matrixport’s head of research, Markus Thielen, institutional buying of Bitcoin is not limited to the United States. There has been a noticeable increase in buying volumes across various countries, including Korea where trading volumes have consistently been around $8 billion for five consecutive days. Moreover, the demand for Bitcoin is not restricted to the flagship cryptocurrency alone, as there have been inflows into altcoins and meme coins as well.
The report also highlights the anticipation surrounding the launch of Spot Bitcoin ETFs in different regions, such as the planned launch in Hong Kong and BlackRock’s initiative to introduce a Bitcoin ETF in Brazil. Despite a slight slowdown in Bitcoin Spot ETFs towards the end of February, the overall bullish sentiment for Bitcoin remains strong. Thielen believes that if Grayscale’s outflows continue to decrease, further rallying of the Bitcoin price can be expected.
Thielen emphasized the macro upside potential of Bitcoin compared to gold, especially in the context of the exponential growth of the United States debt. He points out that Bitcoin has evolved into a better macro asset than gold, as evidenced by its reaction function to changes in various economic factors such as interest rate expectations and geopolitical conflicts. The shift of assets from Gold ETFs to Bitcoin ETFs further supports the idea that Bitcoin is becoming a preferred investment choice for many institutional investors.
One of the key factors influencing the Bitcoin price identified by the analyst is the significant decrease in the availability of over-the-counter (OTC) BTC for large institutions. The dwindling OTC balances, along with declining balances on major exchanges like Binance and Coinbase, indicate a growing scarcity of Bitcoin in the market. This scarcity is leading to a situation where investors are less sensitive to price fluctuations, which could potentially drive Bitcoin to a new all-time high in the coming weeks.
The surge of Bitcoin in March reflects the growing confidence of institutional investors in the cryptocurrency market. The increasing institutional buying, coupled with the anticipation of new Bitcoin ETF launches and the scarcity of BTC in the market, all point towards a bullish trend for Bitcoin’s price. While the market always carries risks, the current momentum of Bitcoin suggests that reaching new highs in the near future is a strong possibility. Investors are advised to conduct thorough research before making any investment decisions, as the cryptocurrency market is known for its volatility.