Editor's Note: This article comes fromChain reference (ID: lianneican), Author: Internal Reference Jun, reprinted by Odaily with authorization.
Editor's Note: This article comes from
Chain reference (ID: lianneican)
, Author: Internal Reference Jun, reprinted by Odaily with authorization.
Entering September, after BTC fell below the 10,000-point mark for the last time, it began to fluctuate upwards, and recently hit new highs in 2020, breaking through $14,000 at its highest.
What is different from the past is that the altcoins did not follow the general rise, but were either stagnant or falling endlessly. Many people don't understand and think that this is not a bull market, but Mr. Internal Reference believes that this is the attitude that a digital currency bull market should have. It also allows people to re-recognize altcoins, allowing digital currencies to truly return to the track of value investment.
BTC's continuous new highs are inseparable from the international political and economic trends, and at the same time, some related benefits also appear frequently.
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The COVID-19 pandemic has increased investor appetite for Bitcoin, according to a survey by Grayscale Investments.
The firm surveyed 1,000 U.S. consumers between the ages of 25 and 64 with household investable assets of $10,000 or more participating in personal investing. The survey was conducted from June to July 2020. 63% of respondents who have invested in Bitcoin in the past four months said the pandemic had an impact on their decision. Additionally, 39% believe Bitcoin is more attractive due to the pandemic. Only 13% said events surrounding COVID-19 made the asset less attractive.
“Bitcoin appears to share some attributes with safe haven investments, according to respondents. Bitcoin’s scarcity, verifiability, lack of correlation with global markets, and the fact that it is not controlled by government organizations Bitcoin is similar to traditional safe haven investments.”
This seems to support Bitcoin's status as a safe-haven asset that many analysts have proposed. According to the survey results, people's interest in Bitcoin as an investment seems to increase in tandem with education levels. As a result, only 17% of respondents without a degree had an interest in the asset, compared to 29% of holders with postgraduate degrees.
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Traditional financial companies have laid out
Grayscale has recently reached a new high in digital asset investment. According to an update posted on Grayscale’s Twitter account on Oct. 22, the investment firm now has $7.3 billion in assets under management. That's up $1 billion from the $6.3 billion AUM Grayscale reported on Oct. 15. Given that each report is delayed by 24 hours, the figures given in this report are for the previous day. The funds are primarily held by Grayscale’s bitcoin and ethereum trust fund, as well as the firm’s digital large cap fund. The recent surge may have something to do with the surge in crypto market prices following the recent news that PayPal will offer crypto payments from 2021.
Grayscale reported that its Litecoin Trust has gained the most since the previous day’s report, more than 7.5%, while the company’s Zcash Trust has gained more than 6% over the same period. The firm also has small allocations on Ethereum Classic (ETC), Horizen (ZEN), Stellar Lumens (XLM), XRP, and Bitcoin Cash (BCH).
Grayscale CEO Barry Silbert commented on the investment firm's recent gains on Twitter, saying it "raised $300 million in AUM in one day."
Following Grayscale, other financial institutions have recently seen the potential of crypto. In addition to MicroStrategy buying $415 million in BTC this year, monitoring resource Coin98 Analytics reported that digital asset manager CoinShares recently took control of 69,730 BTC — worth more than $900 million after the currency broke through $13,000 .
Fidelity Investments — one of the world's largest asset managers — is continuing to expand its global presence in the cryptocurrency industry through its dedicated crypto subsidiary. According to a Bloomberg report on October 29, Fidelity Digital Asset Services, the crypto arm of Fidelity Investments, has partnered with a Singaporean startup, Stack Funds, to expand its custody services in Asia.
Since its launch in late 2018, Fidelity Digital Assets has been expanding its services globally. In December 2019, Fidelity Digital Assets established an official entity in the UK to provide services to European institutional investors.
In Asia, crypto-related demand is growing rapidly, as a large number of companies have been expanding their services to the region in recent months. In early October 2020, Gemini, a major U.S. crypto exchange, announced that the company was expanding in the Asia-Pacific region and recruited a new employee with a high profile. Chainalysis — a major global cryptocurrency analysis firm — said it will launch new offices in Singapore and Tokyo to better serve clients in the Asia-Pacific region.
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Millennials' interest in digital asset investment has greatly increased
In Flows and Liquidity, one of JPMorgan’s flagship publications, the authors say that characterization of Bitcoin as a “risky” asset rather than "Safe-haven" assets are "more suitable".
Bitcoin's function as a risk asset "may reflect more on the need for an 'alternative' currency than a 'safe-haven' asset or a 'hedge'".
“The same is true, to some extent, of gold,” the authors added, although the precious metal is significantly less volatile than bitcoin.
How investors currently view bitcoin’s value means it could “compete more intensely” with gold as an “alternative” currency in the coming years, the analyst wrote. According to the note, Bitcoin's role as a contender for gold is amplified by millennial investors' interest in cryptocurrencies, and that the younger investor base inevitably "becomes a more significant part of the investor base over time." ".
In addition to interest from millennial investors, the note also highlights the significance of corporate and traditional investor interest giving Bitcoin credibility as an investment vehicle. Specifically, PayPal’s Wednesday announcement of support for bitcoin and altcoins is “another big step forward for businesses to support bitcoin,” according to the note.
The authors also noted that activity in the CME futures and options markets indicated a “strong growth” in institutional investor interest in Bitcoin. For example, as of Thursday, the CME bitcoin futures market has quietly become the second-largest market by open interest, surpassing the two dominant crypto-only trading platforms BitMEX and Binance.
However, utility as a store of value isn't the only catalyst for Bitcoin's potential upside. According to the author, Bitcoin and altcoins could appreciate significantly in value if they are adopted as a means of payment. “The more economic agents that accept cryptocurrencies as a means of payment in the future, the greater their utility and value,” the note said.
Ultimately, while Bitcoin “currently looks overbought in the short-term,” the author reiterated that Bitcoin’s potential long-term upside is “considerable.”
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The number of BTC whales reaches a record high
The number of Bitcoin (BTC) whales hit an all-time high during the latest price rally. On October 20, there were 2,178 Bitcoin addresses holding at least 1,000 BTC. By October 25, that number had increased to 2,231. At current prices, 1,000 BTC is equivalent to about $13 million.
According to BitcoinCharts, these whale addresses actually control 7,902,469 BTC, or 42% of the total supply. While we know the number of whale addresses, we don't know how many individuals or entities control those addresses. Multiple addresses may be controlled by a single entity, and likewise, an address may be controlled by a multi-party multi-signature wallet.
According to researchers, approximately 1.1 billion BTC are held/controlled by Bitcoin creator and original miner Satoshi Nakamoto. The vast majority of coins believed to belong to Satoshi have never been touched.
We can also observe an increase in “hodling” patterns—the proportion of Bitcoin supply that is temporarily untouched. 62% of the supply has been inactive for at least 1+ year, and nearly a third of the supply has not changed addresses for 3 years or more.
While Bitcoin saw its highest weekly close since 2018 this past week, most whales and holders don't appear to be in a hurry to divest their holdings.
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BTC as an Investment Has Reduced Risk
Bitcoin has gained remarkable popularity in the decade since its inception in 2009. Big mainstream players such as Infinity Strategies have recently started pouring significant sums into the asset, making its viability as an investment more normalized by some. Mike Novogratz, CEO of Galaxy Digital, said that Bitcoin is now clearly a financial game.
