The Bitcoin price briefly touched the $29,000-mark, its highest level on record, on Wednesday as institutional players—particularly the New York-based Grayscale Investments—continued to suck its active supply against a booming retail demand.
Bitcoin Accumulation On
Die Welt’s Senior Editor Holger Zschäpitz noted that Grayscale’s asset under management surpassed $19 billion earlier this week. The digital asset management firm allocated the biggest portion of its holdings to BTC, of about $16.3 billion of the entire portfolio. Meanwhile, it kept the rest of Litecoin, Ethereum, Bitcoin Cash, Ethereum Classic, XRP, and ZCash.
Meanwhile, data fetched by ByBt.com showed a steady uptick in Grayscale’s Bitcoin reserves. The firm was holding about 588,000 BTC units last week. But as of Wednesday, the amount reached 607,000 BTC—almost 4.5 percent higher.
The cost to purchase one Bitcoin increased by 9.80 percent within the same period.
Mr. Zschäpitz stated that the institutional trend might end up leading BTC/USD another $1,000 higher, hitting $30,000. Other analysts, too, envisioned the cryptocurrency to hit the said milestone. Only Yearn Finance’s YFI—a DeFi token—has been able to reach and breach the $30,000-mark to this date.
The fundamental tailwinds that have propelled Bitcoin to its recent all-time highs remain in place in 2021. They include extraordinary monetary policies promoting near-zero interest rates and infinite debt purchase, and expansive stimulus packages aimed at aiding people and businesses through the coronavirus pandemic.
David Grider, the lead digital strategist at Fundstrat, says BTC/USD could grow to as far as $40,000 in the next 6-12 months.
“Conditions are in place for a continued rally in cryptocurrency prices over the course of the next year,” Mr. Grider wrote, adding that he remains bullish as investors seeking to add exposure in the Bitcoin market could favor pullbacks as well.
“We wouldn’t view these events [price corrections] as long-term negatives for Bitcoin, but if such events unfold, they may negatively impact broader market sentiment and prices,” he said.
Bitcoin’s technical indicators show it as an overbought asset on longer-timeframe charts. The cryptocurrency has rallied by almost 300 percent this year despite witnessing a major price crash in March 2020.