2020 held numerous predictions for the cryptocurrency, some of which the asset exceeded expectations. Around last year’s ending, Bitcoin surged, which surprised most crypto enthusiasts since most believed it would not leave its $19,500 benchmark. Ever since it rose and exceeded its resistance point, the year saw continuous increases in price, linked to institutional buyers’ entry.
The buyers kept the price growing by buying billions worth of the asset every month, based on Grayscale’s statistics. Sonny Singh is the firm’s Chief Commercial Officer, and he believes that institutional buyers are the primary cause of the price surge. Singh went ahead to predict that Bitcoin might surge even more in a month.
Singh’s fears concerning institutional buyers
The rate at which institutional investors took the crypto industry by storm surprised most. Many experts predicted their entry, but last year’s adoption changed the cryptocurrency game in a way that retail buyers can never. Their entry created an assurance for critics, and some crypto critics even invested millions into the digital asset.
Bitpay’s CCO pointed out that institutional investors helped the digital asset surge despite the unfortunate drop in value during the early Covid-19 days. He has reservations about the new set of buyers, so he isn’t sure the buyers are investing long-term. While some predict that institutional buyers will keep the investments for long, Singh sees a sell-off if Bitcoin prices continue to surge.
He said that many buyers bought their holdings when the price was $20,000, and investors might predict that based on crypto volatility, the higher it surges, it lower it falls. He foresees a possible drop in currency value if the sell-off eventually takes place. Sonny Singh explained that most institutional buyers plan to hold their assets for a period of three to five years.
Still, if the price finally hits $45,000 by February, they would have made two times their investment and dump the previous plan of waiting for a couple of years. The CCO revealed that high-net-worth buyers would sell-off some of their Bitcoin holdings when the price skyrockets to that level.
How institutional buyers took over 2020
Many highly-funded firms took an interest in cryptocurrency, especially Bitcoin, in 2020. While some linked the sudden attraction to Federal governments printing too much money, others explained that businesses wanted to reduce their gold dependency and diversify their assets.
MicroStrategy increased its Bitcoin holding late last year and even took fundings from its reserves to buy more cryptocurrency. In a bid to buy, even more, the business intelligence company got more investors to increase their holdings by over $550 million. The company bought its recent holdings around the $20,000 price range.
MassMutual played a significant role in influencing other firms to invest in Bitcoin. The firm bought crypto worth around $100 million before its iconic surge. Someone commented on MassMutual’s purchase and insisted that the company is not selling off its holdings anytime soon. Whereas some believe big companies would hold their asset, Singh believes the profits made will cause rapid sales of Bitcoin. He concluded by saying that Bitcoin hitting $45,000 is inevitable due to specific factors.
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