Bitcoin has shown incredible endurance this year, rising beyond $30,000 and gaining more than 80% year to far. However, research suggests that there may be more room for expansion.
In an amazing recovery from a year ago, the flagship cryptocurrency overtook key asset classes. Alkesh Shah and Andrew Moss of Bank of America Corp. observed that a net $368 million in BTC was sent to personal wallets in the week ending April 4. Surprisingly, this period had the second-largest net bitcoin outflow from crypto exchanges in 2023.
In a note, the duo stated that the pattern of investors shifting tokens from crypto platforms to personal wallets often indicates that investors are looking to hold them, implying a decreasing sale pressure.
“Investors transfer tokens from exchange wallets to their personal wallets when they intend to hold them (or HODL), indicating a potential decrease in sell pressure.”
Concerns over a US regulatory crackdown on cryptocurrency exchanges, according to the BofA strategists, may have contributed to the outflow. For example, significant players in the country, like as Coinbase and Binance, are under intense scrutiny from officials.
The current spike has reignited debate about Bitcoin’s utility as a store of value. Analysts have previously emphasized the crypto-asset’s endurance, pointing out that it has survived two previous “winters” prior to the 2022 dip. In each case, the turnaround produced exponential returns.
Bernstein analysts recently stated that choosing gold over bitcoin is foolish, comparing the choice to “hating on a faster horse.” For example, Robert F. Kennedy Jr. says Bitcoin is an asset that might provide individuals with a “escape route” from the financial sector’s upheaval. The nephew of former President John F. Kennedy positioned himself as a Bitcoin enthusiast in filings filed with the US Federal Election Commission on April 5 to run as a Democratic presidential candidate in 2024.
Kennedy also accused President Joe Biden of “weaponizing” the country’s regulatory bodies, such as the DOJ and the FDIC, by forcing certain banks to suspend operations to crypto firms at the end of last year.