Analysts believe that the fear of missing out may support Bitcoin’s rally as the digital currency continues to lure institutional investors, reports Bloomberg. Bitcoin has risen 170% this year to hit a record of almost $20,000 in December sparking speculations that the financial industry might be behind the latest surge.
- The rise of regulated crypto exchanges and custodians has eliminated the “career risk” for institutional investors, increasing their appetite for Bitcoin.
- Strategists have started to expand or initiate Bitcoin coverage, signaling more demand for crypto analysis in the financial industry.
- The recent surge has left analysts betting that Bitcoin might be displacing gold as the portfolio diversifier.
- Critics see the Bitcoin rise as pure gambling by retail investors and warn that a bust like the one after the peak three years ago might occur.
- JPMorgan Chase & Co. strategists point to the Grayscale Bitcoin Trust, which invests in Bitcoin and tracks its price, as a potential window into wider crypto enthusiasm beyond the retail demand.
- Grayscale vehicle’s assets have swollen to more than $10 billion from $2 billion at the start of December last year
- Digital assets remain a small market, comprising just $580 billion of the total $52 trillion funds managed by institutional investors.
Bitcoin is currently declining. BTCUSD is down 0.92%