Bitcoin returns to $29,000, can the old narrative of institutional entry ignite a new bull market?

Bitcoin at $29,000: Will institutional investment spark a new bull market?

Traditional financial giants have begun to lay out encryption.

Written by: Qin Xiaofeng

OKX Ouyihangqing shows that in just one night, Bitcoin surged by $2,000, once again breaking through $29,000, with a 24-hour increase of 7.1%, leading all major altcoins. Grayscale Bitcoin Trust GBTC has risen by 27% in the past two trading days (June 16 and June 21), returning to the high point level in mid-April of this year.

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Interestingly, this round of market upswing occurred after many traditional financial giants such as BlackRock and Fidelity recently launched intensive encryption actions, so the old narrative of “institutional entry” in the last bull market has been frequently mentioned again, but will this be the beginning of a new bull market?

Market Review: Altcoins are sluggish, BTC leads the way

Due to the recent regulatory tightening and market maker exits, the encryption market has performed poorly, and Bitcoin fell below $25,000 last week, hitting its lowest level since mid-March, with a constant market wail and strong bearish sentiment.

However, in just one week, Bitcoin has regained lost ground, rising from $24,800 to break through $29,000, an increase of nearly 17% in a week. Especially last night, BTC surged rapidly, rising more than $2,000 overnight, with a 24-hour increase of 7.1%. Many encryption investors exclaimed “the bull is back” after waking up, and various communities began to become active.

Unlike Bitcoin’s strong performance, altcoins are relatively sluggish. In the past 24 hours, ETH has only risen by 4.3%, and only ADA among the top ten tokens in terms of market capitalization has a higher growth rate than BTC (7.3%). In the top 50 tokens by market capitalization, STX (21.3%), OP (15.7%), HBAR (9.5%), and ARB (7.8%) performed well, and the rest of the tokens had lower growth rates than BTC.

In fact, the ALT/BTC exchange rate has been falling continuously for the past two months, and Bitcoin’s trend has been stronger than other mainstream currencies. In terms of market share, BTC’s share has risen from 45% in early May to 47.37%, while ETH has remained around 18%.

Boosted by the overall uptrend of the market, the total market value of cryptocurrencies has risen to $1.1718 trillion, up 5% in the last 24 hours. Since the beginning of the year, the total market value of cryptocurrencies has risen by $340.1 billion, a cumulative increase of 40.8%. Cryptocurrency user trading enthusiasm has clearly risen, with today’s fear and greed index at 59 (compared to 49 yesterday), indicating an increase in greed compared to yesterday, with the rating changing from neutral to greedy.

As for derivative trading, Coinglass data shows that the entire network has liquidated $155 million in the last 24 hours, with BTC liquidating $72.79 million and ETH liquidating $25.28 million, making a total of 43,048 people who have been victims of liquidation.

In addition, the discount of GrayScale’s products has improved somewhat. The net asset value discount rate of GBTC is currently at 33.5%, and GBTC’s price has risen by more than 27% in the past five trading days. Since last December, GBTC’s price has risen by 120%, outperforming the spot price of BTC during the same period. The discount rates of other mainstream currency trust products are as follows: ETH (-46.84%), ETC (-55.64%), LTC (-42.43%), BCH (-16.67%), ZEC (-10.87%), ZEN (-1.79%), and BAT (-44.38%); there are six products with positive premiums, namely FIL (+278.5%), SOL (+178.22%), LINK (+100.2%), MANA (+93.44%), XLM (+53.53%), and LPT (+5.54%).

Cryptocurrency-related listed companies have also been affected by the uptrend, with stock prices rising by more than 10% in the past week. Among them, the US regulatory-compliant cryptocurrency platform Coinbase (NASDAQ: COIN) rose 2.7% today to $57.09, while the largest bitcoin-holding listed company, MicroStrategy (NASDAQ: MSTR), rose 6.8% to $313.4 today.

Institutional entry, building a bridge for cryptocurrencies

One view on this round of uptrend is short squeezing. The intensification of regulation in the past two weeks and bitcoin’s breaking of the $25,000 support level has caused a strong bearish sentiment in the market. Coinglass data shows that the BTC long/short ratio hit a low of 0.94 on June 13th, and in market sentiment surveys, 36% of respondents said they were “bearish”, 15% said they were “extremely bearish”, more than half, and only 29% of respondents were bullish.

Additionally, the good news on the news front is that traditional financial giants have been taking action recently, applying for Bitcoin ETFs and trusts and launching encrypted trading platforms, opening up traditional capital entry channels.

On June 15th, BlackRock, with a management scale of 8.59 trillion US dollars, took the lead in action, and its iShares department submitted the iShares Bitcoin Trust (Bitcoin Trust) application document to the SEC. Influenced by this news, BTC rose by nearly 5% on the same day, reaching 26,500 US dollars at one point, stopping the downward trend.

Morgan Creek Digital co-founder Anthony Pompliano commented that BlackRock’s actions may attract Wall Street giants to imitate. Many Wall Street companies may launch fast-following products to compete with BlackRock. Media attention may lead to capital inflows into Bitcoin.

The market’s development has validated Anthony Pompliano’s prediction. Today, asset management company WisdomTree submitted a Bitcoin Trust Fund application, and asset management giant Invesco also resubmitted its spot Bitcoin ETF application.

In addition, it is rumored that Fidelity has also started its encryption action. Andrew Blockingrish, co-founder of Arch Public, revealed that Fidelity, the world’s third-largest asset management company with $4.24 trillion in assets under management, may be considering acquiring Grayscale and applying for a Bitcoin spot ETF. This news has not been officially confirmed by Fidelity.

Although Fidelity has not yet applied for a Bitcoin ETF, its investment in the encryption exchange EDX Markets announced yesterday that it will be officially launched, aiming to seize the market under the current regulatory prosecution of Coinbase and Binance. It is understood that EDX Markets is a non-custodial exchange that does not directly handle customers’ digital assets or directly serve individual investors, and only provides four encrypted currency transactions, including BTC, ETH, LTC, and BCH-these assets have not been recognized by the US SEC as securities.

Looking at EDX Markets’ investors, it is even more of a gathering of top traditional institutions, including Citadel Securities (with a management scale of US$35 billion), Jiaxin Wealth Management, Sequoia Capital, Blockinradigm, Miami International Holdings, DV Crypto, GTS, GSR Markets LTD and HRT Technology and other institutions.

For professional investors, the entry of large traditional financial institutions not only has a good demonstration effect, but they are also more willing to allocate investment products to investment tools supported by large traditional financial institutions, and more funds will enter the encryption world through bridges built by traditional institutions.

Of course, it seems premature to say that a bull market has started now, after all, the external financial environment has not improved significantly, and it is difficult for cryptocurrency finance to walk out of an independent trend.

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