Since the March crash in 2020, Bitcoin has rallied from $3,600 to $29,200, by nearly eight-fold. BTC has outperformed all currencies and safe-haven assets and has only lagged behind Tesla among the major U.S. stocks.
Institutions are consistently accumulating
The momentum of Bitcoin is causing institutions to aggressively accumulate Bitcoin as a result.
The go-to metric to use to evaluate the institutional sentiment around Bitcoin is Grayscale’s assets under management (AUM).
The AUM of Grayscale is important because the Grayscale Bitcoin Trust is the go-to institutional vehicle to gain exposure to BTC in the U.S.
On January 1, Grayscale disclosed that its AUM surpassed $20 billion. This means that institutions are holding upwards of $20 billion worth of capital with Grayscale and have invested in cryptocurrencies.
12/31/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
“This is what the start of a monetary singularity looks like. Scarcity v abundance. Bitcoin has no other choice but to GO UP.”
In the near term, the key for Bitcoin to avoid a correction and see an upward trend is for Grayscale inflows to refrain from slowing down.
If inflows into Grayscale’s products decrease or stagnate, this would mean that the institutional demand for BTC is declining. Hence, it is critical for Bitcoin’s rally that institutions continue to accumulate BTC in the foreseeable future.