Wall Street is buying BTC and opting to HODL

Written by: Ali Raza
August 14, 2020
  • Institutional investors are buying BTC in huge quantities — more than miners can produce.
  • Meanwhile, around 40% of the coin's total supply has been sitting still for the past two years.
  • The amount of demand is huge, and it reminds investors of the situation last seen in early 2016.

The time when institutional investors were not interested in crypto, or too unwilling to deal with it, has passed. Recent data from companies such as Grayscale and MicroStrategy reveals that institutional demand is surging quite strongly.

Not only are institutions willing to buy cryptocurrencies, but they also choose to HODL in light of recent price movements, rather than sell.

Institutional demand for BTC skyrockets

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New data shows that institutional investors are buying massive amounts of Bitcoin and choosing to keep it. This kind of behavior was noticed quickly after Bitcoin’s network started expressing similar behavior to that in 2016.

After collecting and studying their data, analysts have noticed that around 40% of BTC supply has been sitting in wallets without moving for more than two years. Meanwhile, institutions are buying more BTC, and seemingly preparing for a long-term investment strategy.

Analyst Kevin Rooke noted recently that BTC miners mined around 12,594 BTC in the last few weeks. At the same time, Grayscale added 14,422 BTC to $GBTC, while Microstrategy purchased 21.454 BTC.

Microstrategy’s move alone was enough to make headlines earlier this week, as the firm bought $250 million worth of BTC. As for Grayscale, it was buying huge amounts of BTC earlier this year, as well. After that, it entered a brief moratorium, after which it started purchasing coins once more.

Investors opting to HODL, rather than sell

While BTC mining continues at full speed, miners cannot seem to keep up with the demand from the two firms. Such massive demand, especially after the mid-May halving, is a strong indicator that the price is going to surge in the near future.

Despite this, investors seem to be intent on HODLing, rather than selling. Many appear to be looking into long-term investment strategies, especially with almost half of the circulating supply being in stasis for over 2 years now.

This kind of behavior was last seen in 2016. While it took almost two more years for BTC to hit its current ATH, everything indicates that history will repeat itself, maybe even faster this time around.