- BTC price printed a 1-month high this week after the OCC granted permission to offer crypto custody services
- Crypto assets under management at Grayscale jumped from $1.577 billion to $3 billion in two months
- Bitcoin bulls are looking to take the price action to $10,000 next week
Bitcoin (BTC) price is trading around the $9,500 mark as the buyers take a step back before continuing their assault at $10,000, the key short-term target. Fundamentally, several key metrics, including Grayscale’s $1.4-billion inflow in the first half of this year, suggest that institutional demand for Bitcoin is on the rise.
Fundamental analysis: Institutional investors seek Bitcoin exposure
The institutional demand for BTC has been growing consistently since the start of this year. However, in Q2 2020 the demand surged significantly. Grayscale, a crypto investment fund, observed an inflow of $1.4 billion in the capital.
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Grayscale is famous for its Grayscale Bitcoin Trust, which enables institutions in the US to gain exposure to BTC via a publicly-traded over-the-counter stock. The demand for the number one cryptocurrency in the world spiked during the period between March and June – a time of the increased market volatility.
A sharp surge in appetite towards BTC could be a collapse in price that occurred in March when the cryptocurrency plunged below $3,600. At that time, over $1 billion worth of futures contracts were liquidated. However, in the next 72 hours, the volumes in retail markets climbed significantly.
Just like their retail peers, institutional investors probably purchased high amounts of Bitcoin after the correction. In the Grayscale Bitcoin Trust, assets under management jumped from $1.577 billion to $3 billion, in the period between March 17 – May 13. Grayscale’s assets registered an inflow of almost $1 billion in one quarter.
“Total investment into Grayscale’s family of products hit $905.8 million in 2Q20. To put that into context, that’s nearly 1.5x the capital raised during all of 2019, and following a record quarter in 1Q20,” states the crypto asset fund’s half-year report.
The steady growth in inflows from institutional investors into BTC, boosted by the developing crypto infrastructure could be of big help to Bitcoin in the long term. Additionally, if the Grayscale Bitcoin Trust adopts alternative investment tools such as an ETF or an exchange-traded note, institutional demand for Bitcoin could rise even more.
Invezz reported that Grayscale Investments is set to avail its bitcoin cash (BCH) and litecoin (LTC) trusts for public trading.
Technical analysis: Equal Legs?
BTC/USD price moved higher earlier this week on news that the Office of the Comptroller of the Currency (OCC) has granted all nationally chartered banks in the United States to offer crypto custody services.
Bitcoin moved to $9,690 – a fresh 1-month high – before pulling back to trade around the $9,500 handle. This move created a first bullish leg, which may potentially turn into the Equal Legs move.
It is a technical term that indicates the equal movements in a signal direction, separated by a correction. If this pullback is taking place now, then the second leg could eventually take Bitcoin price to $10,000 (as seen in the chart).
Bitcoin price is trading around the $9,500 mark again after printing a 1-month high near $9,700. The buyers are looking to take the price action to $10,000 on the back of the surge in demand for Bitcoin from institutional investors.