Singapore – Bitcoin The record-breaking rally seen in recent weeks was partly driven by the entry of more large institutional investors into the market, according to PwC’s global crypto leader Henry Arslanian.
The digital currency rose more than $ 30,000 for the first time on Saturday and advanced more than 300% in 2020. Reuters reported. On Monday afternoon in Asia, Bitcoin was trading around $ 32,668.93, According to CoinDesk.
Cryptocurrency has been around for a little over a decade, but it only started to rise among major institutional investors last year. Bulls said encryption This bitcoin is seen as a hedge against inflation, similar to gold.
“When you look at this bitcoin rally that we have seen in the past two weeks and months, there are two big factors driving it. One of them is the continued entry of institutional players,” Arslanian said on Monday on CNBC.Street signs Asia. “
Bitcoin’s price rally last year was partly driven by fame Billionaires on Wall Street openly support the cryptocurrency. Analysts said their endorsement gave confidence to skeptical ordinary investors. Investors like Paul Tudor Jones And the Stanley Brentmiller Both put the money in bitcoin and indicated its potential as a hedge against inflation.
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Big financial companies like PayPal and Fidelity have made moves in cryptocurrency Meanwhile, the likes of Square and MicroStrategy used their balance sheets to buy bitcoin.
Arslanian said he expects this trend to continue over the coming months, noting that there are many tools now that allow institutional players to take exposure to Bitcoin. “But there are also a lot of organized players. That wasn’t the case two years ago,” he said.
The second development driving the current rally in bitcoins is retail investors and their fear of being lost, according to Arslanian. He said that more people today have more accounts on cryptocurrency exchanges than before because buying cryptocurrencies is easier now than before.
“With these two big elements driving it, there is a lot of momentum going on in the space. There is a lot of optimism in the cryptocurrency markets as well,” he said.
Bitcoin’s recent performance is reminiscent of its feverish spike to nearly $ 20,000 in 2017, which was followed by a sharp downturn in 2018. Eliminate billions of dollars from the market value of major cryptocurrencies. But cryptocurrency fans say the current rally is different because it is driven by institutional buying rather than retail speculation.
Arslanian said one of the big differences between this rally and the one we saw in 2017 is the clarity in the regulations, which were scarce at the time. He said that most regulators around the world today have people working on coding internally. He said that many large financial centers have “very good regulatory clarity regarding the cryptocurrency markets and this provides comfort, not only for institutional investors but also individual investors coming into the market as well.”
While Arslanian declined to set a target price for Bitcoin for this year, he said the current momentum remained optimistic. He added, “More than the bitcoin price, I am seeing the number of new institutional players coming, which I think has a huge impact on the markets.”
– CNBC’s Ryan Brown contributed to this report.