US Investors Boost Bitcoin (BTC) Price Rise as Institutional Demand Rises

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US investors have been investing in bitcoin (BTC) as institutional activity has accelerated, driving the recent rally in the largest cryptocurrency by market capitalization.

BTC’s price gains and trading volume have recently been concentrated during US market hours and have been the primary driver of BTC’s strength, crypto analytics firm K33 Research noted in a report. report.

Bitcoin has surged 85% so far this year, according to data from CoinDesk, outperforming most of the crypto market. The price action came as a host of financial heavyweights including BlackRock, Fidelity and Citadel became more involved with BTC, boosting investor optimism.

Smaller cryptocurrencies have struggled to cope with increasing regulatory scrutiny, be it unregistered securities. Trading platforms subsequently limited the supply of popular tokens to avoid risk.

BTC has seen cumulative gains of around 30% during US market hours since hitting a low of around $16,000 at the bottom, significantly outpacing Asian and European trading sessions. Activity in the United States soared after asset management giant BlackRock filed an exchange-traded fund BTC spot on June 14.

Bitcoin’s latest surge also coincided with the decoupling from the performance of US equities such as the S&P 500 and Nasdaq indices, with its 30-day correlation turning negative last week for the first time since January 2021, K33 noted.

“This shows that US traders are allocating BTC for idiosyncratic reasons” as portfolio diversification, wrote Vetle Lunde, senior analyst at K33.

The BlackRocks initiative has also rejuvenated institutional activity in the BTC market.

Open interest in the Chicago Mercantile Exchange (CME) futures market, a favorite venue for sophisticated investment firms, is nearing its all-time high, according to K33 data.

Digital asset funds saw $199 million in inflows last week, the biggest in nearly a year, with bitcoin-focused funds enjoying 94% of all inflows, according to a company report asset management company CoinShares earlier this week.

The recent activity presents an inflection point in institutional crypto adoption, noted Samir Kerbage, chief investment officer at crypto asset management firm Hashdex.

“We may be in a generational moment for individual crypto investors,” he said.

“The current institutional interest we are seeing is a far cry from the opportunistic FOMO [fear of missing out] we have seen in the past that this can drive up prices in the short term,” Kerbage wrote. “These institutions move slowly and deliberately and invest for the long term once they are there, they are there.”

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