The most recent findings (1) from Matrixport, a platform that provides services related to digital assets, indicate that investment firms have not given up on cryptocurrencies, particularly Bitcoin. According to the latest available data, institutional investors are responsible for 85 percent of all Bitcoin purchases.
Markus Thielen, the head at Matrixport, stated that this demonstrates that investment firms are still highly involved in crypto and indicates that the bull market is getting closer.
The Buying Attitudes of Bitcoin Investors Can Be Determined Based on Their Performance During Trading Hours
According to the research, determining whether an asset is more prevalent among individual or institutional investors based on how well it performs during trading hours in the United States or Asia can assist.
Matrixport clarified that if an asset that trades 24 hours a day does strongly during US trading hours, institutional investors from the United States are purchasing the asset. Yet, if the asset does well during a trading session in Asia, this is a sign that individual investors in Asia are buying it.
The article referred to Bitcoin's performance, noting that its price had increased by forty percent since the beginning of 2023. It was said that 85% of Bitcoin purchases come from investors headquartered in the United States, given that Bitcoin saw a rise of 40%, with returns of 35% during US trading hours.
According to the investigation findings, there is evidence that financial institutions in the United States are currently purchasing Bitcoin.
The statistics that Theilen presented suggested that institutional investors were interested in Bitcoin before they showed interest in other assets. He predicted that layer1 and other crypto currencies would soon beat Bitcoin by utilizing past facts as a guide.
The study also mentioned that news about other projects increased the value of tokens, such as Aptos (APT) and Lido DAO (LDO). Additionally, it was mentioned that the crypto currency market began to recover on January 12 following the December publication of US inflation statistics (the Consumer Price Index).
A Look at the Fear and Greed Index
On January 12, 2023, the United States Bureau of Labor and Statistics issued the consumer price index (CPI) for December. The fact that the index came in at 6.5, which is lower than everyone anticipated, demonstrates that the inflation rate is decreasing. Therefore, it makes sense for Matrixport to believe that they do because a lower inflation rate is often a good indication in the crypto and financial markets.
The crypto finance specialist believes that the price increase in APT can be attributed to a combination of "high" returns made during the US and Asian trading hours.
Despite this, the Bitcoin Fear and Greed Index is now at 55, indicating that investors are pretty greedy for Bitcoin. It suggests that more investors are purchasing Bitcoin at the current price of $23,004.
Prices of crypto currencies are frequently influenced by the feelings of buyers and sellers actively trading in the market. This indicates that negative news can cause a decline in asset values, but favorable news might propel prices to new all-time highs.
The fear and greed index is a barometer of general emotion and a measurement of Bitcoin's dominance in the market, as stated by the Forbes Advisor. Bitcoin's dominance is directly proportional to the market's level of avarice.
As a result of the Fear and Greed Index reaching a new high, an increasing number of institutional and individual investors are focusing their attention on Bitcoin, maybe out of a concern that they will lose out on opportunities.
As a result, when the mood of investors shifts to one of extreme optimism, they buy more bitcoin to boost their gains.
However, the Fear and Greed Index does not react to long-term bulls, which is a critical point to keep in mind, and it simply tracks recent events in the news and changes in the short-term state of the cryptocurrency market.
This may be why the research from Matrixport identified the news around the CPI in December as one of the factors encouraging more investors to acquire Bitcoin. According to the paper's findings, a promising development for Bitcoin would be an ongoing trend toward institutional use.