Institutional investors had not bought USD 100 million worth of cryptocurrencies in one week for many months. Nobody expects the price of Bitcoin to rise now, but those actors show some activity in the market again.
Institutional entities like private and hedge funds had one of the busiest periods over the last two years. The activity recovered throughout September and still seems to accelerate, but it is still far from the frenzy in November and December 2020.
The unknown Windward Fund LP, owned by FirstWatch Crypto, focuses on the least wealthy of the wealthy. Forty-seven people have contributed USD 6 million to that company, according to Daniel McGlinn, one of its executives.
Slightly differently, Stronghold Digital Mining raised USD 9 million worth of stock and options from only two investors. Despite not being a direct purchase of Bitcoin (BTC), the sale of shares may allow holding the cryptocurrency, becoming an indirect investment.
The recent USD million increase to the Ethereum Index Fund of Fidelity may be more intriguing as only one client did it. That shows low demand, an intelligent person, or a Fidelity strategy to cause people to talk about it.
However, its Bitcoin fund raised USD 62 million, more than before NYDIG raised USD 720 million in its Bitcoin Institutional Fund. It is relevant to know that this started on September 22nd with a USD 20 million purchase of Bitcoin and Ether (ETH).
This type of investor had not bought USD 100 million worth of cryptocurrencies in one week for many months. That is also the first time they have purchased close to a billion in two weeks for two years.
Institutional Investors Return to Buy More Cryptocurrencies
After dropping for months until June, the following months have allowed assessing whether it is possible to invest in Bitcoin again.
Amid the turmoil of fiat currencies, a mini-frenzy in corporate bonds, and intense speculation in China, Bitcoin recently found some calm. It even became a little more prominent than stocks, which led some to wonder whether Bitcoin is a hedge against inflation again.
That situation is not unusual, as institutional investors last emerged from late 2020 to the end of 2021 when Bitcoin reached record prices.
Nobody expects the price of Bitcoin to rise while it is bottoming out amid a quiet environment. However, those institutional investors seem to be showing some activity in the market again.
Those well-informed investors believe there might be further drops, but the price might recover in due time. At the current stage, many fall into the trap of waiting for Bitcoin to fall, although it is slowly rising.
Some sophisticated investors are willing to take further risks, especially since the second year of the bears is in a flat line. However, it is more of a slow rally, with some mini-bulls finishing above the low of that cycle.
No one can speculate that the train may leave soon as the bulls remain calm. However, the years of the Christmas bears are always a good time to go shopping.
Since the past does not predict the future, nobody knows whether this cannot occur again. However, the risk-reward calculus at this point may indicate it is doing well, although it seems dead. Of course, it is only a matter of time before seeing how the market influences the price of the pioneering cryptocurrency.
By Alexander Salazar
