After a pretty disastrous 2022 when miners were forced to switch from a holding strategy to a sell-off of their strategic reserves, Bitcoin reaching a key psychological level can be viewed as a smashing success. Bitcoin's passing the $30,000 barrier last week incited crypto miners to send record volumes of coins to exchanges at a total value of $128 million.
Miners are concerned that a price reversal from this key level could be impending due to several negative factors, including harsher crypto regulation in certain countries and the legal action taken against crypto exchanges in the US. What's more, the average cost of mining continues to lead prices on account of the doubling of calculation difficulty over the last 18 months.
That said, Bitcoin will still be able to avoid downward pressure, even if all the coins sent by miners to exchanges are cashed out.
And it's all down to growing institutional demand. Thus, June saw investments increase by 70% YoY to reach $33 billion of assets under management (AUM) by crypto investment funds.
What's more, a single major public holder, MicroStrategy, bought 12,333 BTC worth a total of $347 million over the last two months. The company now holds 152,333 BTC, at an average price of $29,668 per coin. Q1 2023 was the first profitable quarter MicroStrategy has had since 2020.
Interest in the cryptocurrency has hotted up significantly following a raft of new spot Bitcoin ETF applications to the SEC. The applicants include one of the biggest investment firms in the world in terms of assets under management, Blackrock. According to several experts, the presence of such a major player at the table will only increase the likelihood of the application being approved.
If the fund does go ahead, Bitcoin is likely to be met with a new wave of institutional demand. Traders are already buying the rumour, which has been reflected in a higher overnight rate for perpetual futures since the news was released.
StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)
