Institutional investors will permanently increase Bitcoin price
The price of Bitcoin has pulled back slightly after reaching record highs of over $61,000 earlier in March.
Since the rally got underway in October, Bitcoin’s price is up almost 500%.
Yet, as I was quoted by the Daily Mail, amongst other media, this a drop in the price will spark a rise in institutional investment, which will permanently drive up the price.
Indeed, for the past five months, the world’s largest cryptocurrency has enjoyed an impressive rally, hitting all-time highs and smashing countless barriers nearly every week.
The momentum sparked as investors are seeking alternatives to fiat currencies as central banks and governments across the globe continue to pump new cash into economies, as Wall Street giants advance their crypto activity, and as billionaires like Tesla’s Elon Musk and Twitter’s Jack Dorsey pile into cryptocurrencies.
All this has fuelled the media hype and ignited huge interest amongst retail investors, who are more eager than ever to invest in crypto, commonly dubbed ‘the future of money’.
Nevertheless, this momentum does look to be slowing down, with Bitcoin’s recent consolidation sitting around the $55,000 mark.
This slowdown, along with more stringent regulatory scrutiny, will likely prompt the many more inexperienced investors to cash-out their Bitcoin, driving the price lower temporarily.
This is then a time when institutional investors will likely pile in, employing the so-called ‘buy the dip’ mantra.
These investors bring with them their huge capital and expertise to the market, which will act as another confidence boost for more and more retail investors.
Therefore, I believe this temporary slowdown in the price of Bitcoin will prompt surging institutional investment, resulting in prices permanently increasing.
Moreover, last month, deVere carried out a survey of our global clients that revealed 70% of the Baby Boomer and Gen X respondents are already invested in cryptocurrencies or are planning to do so in 2021.
Indeed, these baby boomers and Gen X are fully embracing the cryptocurrency revolution, which will, of course, further boost prices in the long-term.
I believe institutional investors are waiting for prices to edge down further, and they’ll be ready to substantially hike their exposure to crypto when they do.
Should this occur, which is highly likely, it will drive prices skywards.