Bitcoin’s price rally is turning heads. While previous rallies have primarily excited retail investors, this current bull’s run is attracting high-net-worth individuals. Over the past week, Bitcoin has managed to stabilize above the $18,000 price threshold. The asset’s performance has seen it pop on the radar of some big investors.
Time to Get Into Bitcoin
Yesterday, Bloomberg published a report outlining how big investors were trooping into the Bitcoin market out of the Fear Of Missing Out (FOMO). The report highlighted that many institutions have already plowed money into the leading cryptocurrency, with others monitoring its performance to evaluate a possible purchase.
Henri Arslanian, a crypto executive at financial services giant PricewaterhouseCoopers, explained to Bloomberg that institutional investors’ action was the most significant difference between Bitcoin’s current bull run and that of 2017. Arslanian highlighted that while the 2017 bull run was driven by retail investors FOMO, institutions appear to be exhibiting the psychological trait this time around.
While Bitcoin is yet to break the all-time high convincingly, the asset is inching ever closer to the $20,000 mark. Opportunistic institutional investors are considering this -a s well as the asset’s 170 percent gain year-on-year – as reason enough to invest in it.
There has been no secret that institutional investors have been moving into the Bitcoin space this year. MicroStrategy, the world’s largest provider of cloud-based business solutions, has been the standout company in this regard. In August, the company completed a $425 million Bitcoin purchase as it moved into what is called the “Bitcoin standard.”
So far, the decision appears to have paid off. Going by market prices, MicroStrategy’s Bitcoin purchase at the time has turned into a $730 million-plus payday. The company has also made more from its Bitcoin bet than it did from its core business over the past three years, per data from independent crypto researcher Kevin Rooke.
Microstrategy has earned $78 million in the last 3.5 years from their business operations.
Microstrategy has earned $100 million in the last 2 months from their Bitcoin purchases.
— Kevin Rooke (@kerooke) October 27, 2020
Several Available Avenues
It is expected that more institutions will flood the Bitcoin market in the next few months. Last week, Bloomberg reported that several Wall Street stalwarts had begun debating its potential for usurping gold as the global reserve asset.
As the report explained, support from investment giants like Paul Tudor Jones and Stanley Druckenmiller had helped Bitcoin’s case on Wall Street. Now, many are looking at the potential of the leading cryptocurrency becoming the world’s top reserve asset.
A more substantial institutional influx is required for this to happen, even though numbers have been impressive for now. Institutions also have several ways to enter the market. As reported by Inside Bitcoins, Guggenheim Partners, an asset management giant, had reserved the rights to its $5.3 billion Macro opportunities Fund in Grayscale Investments’ Bitcoin Investment Fund.
Grayscale is the world’s largest independent crypto asset manager, with over $5 billion in assets under management. The firm also has over two percent of the total Bitcoin supply.
Beyond Grayscale, investors can also take advantage of institution-facing exchanges. San Francisco-based exchange Coinbase revealed last week that it was the architect of MicroStrategy’s Bitcoin purchase.