The crypto market is in the midst of an incredible rally, led by the increasing involvement of major institutional investors in Bitcoin. U.S. investors in particular have been piling into Bitcoin (BTC), pushing its price to the skies. According to CoinDesk data, this has represented an 85% surge in the market so far this year. Amidst the raging rally, the performance of BTC has decoupled from that of traditional traders, with its 30-day correlation turning negative for the first time since January 2021, K33 Research noted.
Record Inflows: Digital Asset Funds Gain Investor Interest
This surge is the direct result of powerful forces in the US space. Most notably, asset management great BlackRock filing for a spot in the BTC exchange-traded fund (ETF) market on June 14th has been the spark for the current investor revolution. Trading platforms limit smaller coin offerings due to regulatory scrutiny, resulting in a surge in BTC popularity. US activity spiked after BlackRock’s ETF filing, with Bitcoin’s gain and trading volume concentrated during US market hours.
Additionally, Bitcoin’s surge coincides with an inflection point in the institutional adoption of cryptos. Open interest in BTC futures, which is favored by sophisticated U.S. investors, has been nearing an all-time high, K33 reported. Bitcoin-focused funds experienced record-high investor interest, leading to the largest inflows in nearly a year for digital asset funds.
U.S. Investors as Driving Force: Concentrated Gains and Trading Volume
US-based financial heavyweights like Fidelity, Citadel, and BlackRock are driving optimism among global investors. Vetle Lunde, the senior analyst at K33 Research, suggests that U.S. traders allocate in BTC for portfolio diversification reasons. Samir Kerbage, CIO at Hashdex, believes we are witnessing a generational moment for individual crypto-investors. Institutions move slowly and deliberately, investing for the long term. Once they are in, they are in.
U.S. investors are the driving force behind Bitcoin’s rise, with gains and trading volume concentrated during US market hours. Blackrock’s ETF market entry drives BTC surge, record open interest, and increased digital asset fund inflows. Analysts suggest that the current increased institutional activity is far from the short-term opportunity-seeking “FOMO” attitude seen in the past. This could mark a generational moment for individual crypto-investors. Expect to see this rally continue as U.S. investors capitalize on their newfound enthusiasm for BTC.
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