According to the head of research and strategy at Matrixport, layer 1 and other altcoins will soon outperform Bitcoin in the industry.
According to the chief strategist of Matrixport, institutional investors are “not giving up on crypto,” with recent data suggesting that as many as 85% of Bitcoin purchases were made by American institutional players.
The fact that institutions are not “giving up on crypto,” according to Markus Thielen, director of research and strategy at the financial services company suggests that we may be entering a new “crypto bull market now,” according to Cointelegraph.
The information was provided in a report from Matrixport released on January 27 and suggests that it is possible to determine whether institutional or retail investors prefer a particular digital asset based on whether it is performing well during American or Asian trading hours at any given time.
According to the report, if an asset that trades 24 hours a day “performs well” during American trading hours, it means that American institutions are purchasing it, whereas an asset that experiences growth during Asian trading hours means that Asian retail investors are purchasing it.
According to the report, Bitcoin has increased in value by 40% so far this year, with 35% of those gains taking place during U.S. trading hours. This means that U.S.-based investors have made a “85% contribution,” suggesting that American institutions are currently buying Bitcoin.
According to prior research, institutions typically start out by purchasing Bitcoin before making investments in other cryptocurrencies, Thielen continued. He observed:
The report noted that news about other projects, such as Lido DAO (LDO) and Aptos, had a positive impact on token prices, but the cryptocurrency rally didn’t begin until the U.S. inflation data was made public on January 12.
Also mentioned was the fact that APT seems to be performing well 24/7 while Ether appears to be able to perform well during US hours, indicating “institutional flows” into the cryptocurrency.
As institutional adoption increases, the report’s conclusion was that this “should be a very positive sign for Bitcoin.”
According to economist Lyn Alden, Bitcoin is currently playing “a little bit of catch-up” in order to return to where it would have been in the absence of the FTX collapse.
Despite the fact that liquidity conditions are “good right now,” Alden cautioned that there is “considerable danger ahead” for the second half of 2023, citing the U.S. as a key factor.
According to Alden, as the U.S. Treasury reduces its cash balance to keep the nation’s debt levels low, “liquidity into the financial system” is pushed.
TechDev, a well-known trader and market analyst, also stated that if Bitcoin keeps following the price of gold, it might even “crack the $50,000 mark” in a tweet update on January 26 showing the price similarity between Bitcoin and gold.