Data: Demand for Bitcoin from institutional and retail customers explodes

After "Black Thursday (3 · 12)", it seems that Bitcoin is dead in the eyes of some people: hundreds of millions of dollars worth of BitMEX futures contract positions are liquidated, and the market liquidity of cryptocurrencies is nearly exhausted (a 50% drop in one day) , Twitter encryption community for a while crying howling wolf.


Source: Pixabay

However, as I quoted in a recent Twitter post, evidence from various sources shows that the data shows that the demand for cryptocurrencies (especially bitcoin) by institutional and retail customers is growing rapidly.

"All data points to retail and institutional demand for Bitcoin's explosive growth. This is because BTC is about to cut inflation by 50%, and monetary policy is easier than ever-a perfect storm."

Retail Bitcoin demand is booming

In the past few weeks, the exchanges have seen a strong increase in Bitcoin buying pressure.

According to data from British derivative provider, 81% of its Bitcoin contract traders are long, and 70% of Coinbase user transactions in the past 24 hours have increased their exposure to BTC.

In addition, Decrypt reported that user registrations of Kraken, OKEx, Bitfinex, Paxful, and Luno have increased dramatically, some by 300%.

Most importantly, both "buy bitcoin" and "bitcoin halving" have recently grown strongly in Google's search volume, which confirms the trend of retail investors getting involved in cryptocurrency again.

The above is a lot of data-based evidence that shows the strong demand for bitcoin from retail investors, although bitcoin's price continued to fall by 50% to $ 3,800 last month.

But this is not all.

Institutions are re-entering

In terms of institutions, Fidelity Digital Assets (Fidelity Digital Assets) is the cryptographic services division of Wall Street giant Fidelity Investments. Fidelity manages trillions of dollars in assets. The company has confirmed its Interest is increasing.

In a response to The Block, Frank Chaparro, a spokesperson for the company, said:

"From a transaction perspective, we continue to attract new customers every month and see a lot of growth. […] In recent weeks, we have seen greater momentum in the entire business."

Everything is about halving Bitcoin

Although it is unclear how much the recent increase in demand has affected the price of BTC, the logic is that the increase in demand we are currently seeing will soon translate into a booming market.

According to most estimates, in about 35 days, Bitcoin's next block reward halving will occur, and the block reward will drop from 12.5 bitcoins to 6.25 per block. This means that the inflation rate of BTC will be reduced by 50%, thereby reducing the number of tokens injected into the system by miners.

The simple relationship between supply and demand shows that as supply decreases and demand increases, market prices should rise. Bitcoin is no exception.

Indeed, PlanB, an anonymous quantitative analyst in the cryptocurrency field, discovered that the scarcity of Bitcoin is related to the network value of assets. The model created by the analyst to express this relationship predicts that after halving, the fair value of his Bitcoin network will rise to $ 1 trillion to $ 2 trillion, or about $ 55,000 to $ 110,000 per token.

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