Event though prices have since cooled off, the Grayscale Bitcoin Trust (GBTC) traded at $11.44. This essentially placed a price tag of $11,600 on Bitcoin on May 29th. Taking to Twitter, Rhythm Trader said:
“Grayscale Bitcoin Trust accumulated 11,236 BTC in April alone. Currently, 54,000 Bitcoin is mined per month. Right now, they are buying up 21 percent of the new supply of Bitcoin. In a year, the halvening will double that number to 42 percent of the supply. Institutions are FOMOing.”
Pundits say that unlike the 2017 bull run that was fueled by a severe case of retail FOMO, this one is being driven by large financial institutions. Institutional firms are accumulating more massive BTC deposits by the day and have become the primary driving force behind the current BTC price hike. GBTC, for instance, is eligible for a few IRA accounts, and its shares are the premier publicly quoted securities that derive all of their value from Bitcoin’s price.
Demand for Bitcoin
Through GBTC’s shares, investors can dip their toes in Bitcoin trading through a trusty legacy investment vehicle. The simple market mechanism of the GBTC security eliminates the need for management of private keys, the purchase or the storage of it. The fact that the security can be held in particular brokerage and IRA accounts may be the push behind its high demand. The insatiable demand for Bitcoin by institutions has skyrocketed, that it is estimated that whales are now Hodling at least $6 billion in BTC more than they had in August 2018.
Elsewhere crypto fans believe that a $10,000 BTC price is all that is required to set the retail FOMO on course. Tom Lee, Fundstrat’s Co-founder, recently sought the opinion of crypto Twitter on what it takes to keep the BTC prices on an upward trend.
The question on his poll asked the crypto fans what they
thought the price was, that would bring the worst case of FOMO on BTC bears. At least 8,000 users took the poll with the
final price coming to the $10K value. Lee is a crypto bull with very lofty
ambitions for Bitcoin. He has, in the past, made high BTC price predictions
that did not materialize. He has also predicted an all-time high BTC price in
2020, and with the current bull run, he just might be right.
A Crypto Spring
Lee on Twitter broke down what he calls his “scientific wild-a**ed guess” (SWAG) guesstimates that show Bitcoin’s price direction. Decreeing a crypto spring, he named catalysts such as increased blockchain transactions volumes and overall crypto trading numbers and technical bullish signals as reasons behind BTC’s price pumps.
Anthony Pompliano of Morgan Creek Digital also adds another
pointer that could be part of BTC’s current rise. Saying when compared to Apple
Pay and Venmo, BTC was used more as a medium of exchange than these two
platforms in 2018.
He, however, added Bitcoin was not very popular in retail use
and that hopefully platforms like Gemini and FlexaHQ would help turn the
situation around for increased BTC mass adoption.
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