Analysts point out that demand from financial institutions and publicly traded companies is the main reason for the sudden retest of Bitcoin’s all-time highs (BTC).
“The main reason for Bitcon’s steady growth was the increased interest and aggressive buying activity from institutions,” said Nick Cote of the gamified trading platform Hxro Labs. “Lots of investors go through shades of gray.”
Rising institutional demand is reflected in heavy accumulation by Grayscale’s Bitcoin Trust, whose BTC holdings exceeded 500,000 earlier this month.
Cote also said top American companies like Square and Microstrategy are “adding BTC to their books as a hedge against inflation and poor central bank monetary management.” He described this behavior as triggering a “positive feedback loop” in the markets:
“There will be withdrawals, of course, but as long as the institutes believe the narrative that Bitcoin is being used as a store of value or a hedge against inflation, it becomes a positive feedback loop.”
Nicholas Pelecanos, trading director at NEM, agreed, stating that Bitcoin’s fundamentals are now stronger than capital has ever been. “
Pelecanos is now aiming for a surge in altcoin markets, stating, “BTC is back at its all-time high. What is noteworthy, however, is the valuation of the altcoins, which on average are still 50% below their all-time high. ”
Despite his optimistic outlook for Alts, Pelecanos warned that many alternative cryptocurrencies have not found meaningful adoption, stating:
“Some altcoins represent projects that no longer work, while other projects have seen tremendous development in both adoption and technology.”
Analysts have also pointed to bullish signals from the mining markets, with Glassnode technical director Rafael Schultze-Kraft noting that miners have hoarded an additional 10,000 BTC since March.
Are miners selling more #BTC at these prices?
I do not believe that.
The Miner Unspent Supply (mined BTC that has never been moved) has been on an uptrend since the March crash.
It has grown by more than $ 10,000 BTC since then. # Bitcoin
Diagram: https://t.co/pXcLqwr5QD pic.twitter.com/wreZg9fdIw
– Rafael Schultze-Kraft (@ n3ocortex), November 25, 2020
Miners’ earnings also recently hit new year-to-date highs after returning to pre-half-lives. Daily earnings were over $ 20 million.