By George Ward
In recent years, the cryptocurrency world has received more attention from institutional investors, and US institutions are leading the charge. A recent report from Matrixport, a cryptocurrency financial services provider, revealed that US institutions account for 85% of Bitcoin buys worldwide.
According to the report, this purchase level is a positive sign for long-term cryptocurrency adoption. Markus Thielen, the chief strategist of Matrixport, stated that institutional investors had not abandoned crypto.
Their data suggests that as much as 85% of Bitcoin purchases globally are from American institutional players. This may indicate that we are now entering a new “crypto bull market.”
In its latest crypto industry report, Matrixport explained that the performance of a digital asset in either the US or Asian trading hours could be used to determine if retail or institutional investors favor such an asset.
The report said that if an asset’s 24-hour trade does well during US trading hours, it suggests that US institutional investors are buying it. In contrast, if the same event happens during Asian trading hours, it implies that Asian retail investors are purchasing the asset.
The report noted that out of the 40% rise in BTC’s price this year, 35% occurred around the same time the US markets were open. Thus, US investors have made an “85% contribution” to the digital asset’s gains.
Institutions Usually Purchase Bitcoin Before Other Cryptocurrencies – Thielen
Furthermore, Thielen said that data shows that institutions usually purchase Bitcoin before investing in other cryptocurrencies. Meanwhile, the report suggested that the recent price uptrend in crypto assets, notably Lido’s native token (LDO) and Aptos’ native token (APT), was due to the recent positive US inflation data.
Additionally, Ether shows strong performance during US trading hours, indicating a rise in “institutional investment” in cryptocurrency. Meanwhile, economist Lyn Alden says the leading digital asset is currently “catching up” to where it would have been if the significant downturn in the crypto market caused by FTX hadn’t happened.
She added that there is a “considerable danger” ahead in 2023, noting that the US economy is playing a role in maintaining the current positive liquidity conditions. Alden explained that as the US Treasury is depleting its funds to preserve its debt levels, it is introducing “liquidity into the financial system.”
In addition, TechDev, a renowned investor and analyst, tweeted regarding the relationship between Bitcoin and gold, implying that Bitcoin could reach the $50,000 level if the trend between the two continues.