• Jinia Shawdagor

Increased Demand for Bitcoin (BTC) by Institutions

As Bitcoin continues to smash key resistance points, it seems like it’s the 2017 bull run again. However, unlike that time when retail investors were the ones dominating the crypto market, this time institutional investors are ‘hodling’ a large share of Bitcoin.

Since the launch of blockchain technology, it has shown significant development in many institutions. This advancement has sparked interest from a lot of institutions globally. Looking through the analysis of key metrics based on blockchain technology and Bitcoin, we can see a rapid surge within the market.

A surge in BTC appetite by clients

In October, Grayscale Investments released the 2020 Bitcoin Investor Study, which indicated that there was a large growth in BTC interest from clients looking to invest in BTC. The report stated,

This year, 62% of investors reported that they are 'familiar' with Bitcoin, compared to 53% in 2019. In addition, nearly half of those surveyed predicted that digital currencies will be regarded as mainstream by the end of the current decade.

Within the first half of 2020, Grayscale has already reported upwards of $1.4 billion inflows from different institutions looking to invest in cryptocurrencies. It is without a doubt that 2020 has seen a significant institutional increase in Bitcoin. With a steady rise, the predictions are more optimistic than ever. Data metrics show a spike, especially from substantial investors like Grayscale.

Interest key financial institutions

Over the last two months, some major companies have pumped millions of dollars into buying a share of Bitcoin. In August, business analytics and mobile conglomerate, Microstrategy announced that the Nasdaq-listed institution had bought Bitcoin as its primary treasury asset. Following the acquisition of 21,454 Bitcoins, the company’s CEO, Michael J. Saylor termed the world’s largest cryptocurrency as ‘digital gold’.

Shortly after, online payment giant Square, revealed that they had made a $50 million investment by purchasing 4,709 Bitcoins. Another major institution that has shifted its asset base into Bitcoin is an investment management firm, Stone Ridge, which has an impressive $115 million in Bitcoin under its management portfolio.

Long-term outlook

Predictions show that more institutional investors will invest in Bitcoin by solidifying the entire Bitcoin technology's foundational infrastructure. Investment portals like the Grayscale Bitcoin Trust are a great start to boost further Bitcoin institutional demand. They would eventually work as an exchange-traded note as well as ETF.

The growth of Bitcoin, both from individuals and event institutions that are not specifically financially based, is promising. With billions of dollars at stake, the upward match keeps sparking interest from all corners, and institutional investors don’t want to miss out.