The cryptocurrency market has been on a surge in recent weeks with the market receiving new money. Crypto-focused investments have doubled in the recent week compared to the other weeks when the market has been on a sideways movement.
More than $226 million was invested in digital assets last week. This is more than double the previous week which topped at $90 million. The major focus was on the Bitcoin funds which received around $156 of the total amount invested in the week.
The increase in the crypto-focused market comes at a time when the crypto market is on a bullish run. Bitcoin in particular, has seen some of the most impressive runs since its inception. The token has regained from the slump that it had by mid-July where it was trading at the lows of around $29,000. This was due to the China crypto crackdown effects and the Bitcoin mining environmental concerns coming to light.
From then, the marker has been corrected with massive development coming along. For example, El Salvador declared Bitcoin as a legal tender. Reports of five other countries following suit also emerged. All these gave the market a positive outlook hence encouraging investors to put their money in digital currencies.
The sustained bullish run has seen Bitcoin surpass its highest all-time blasting through $66,000. There are indications that the run will keep on with some experts claiming that Bitcoin will hit $100k within the next two months.
For how long will the Bitcoin positive sentiment continue?
Bitcoin remains a decentralised market with demand and supplies the main determinants of value. Following the surpassing of the all-time value, there are high possibilities of an increased positive sentiment.
These high values are most likely pushed by the approval of the first US Bitcoin Exchange-Traded Funds (ETFs). For the longest time, the Securities and Exchange Commission (SEC) had failed to approve any application for trading ETFs, citing possible market manipulations. However, it in the past week approved the first of the ETFs ever.
The ETFs provide a more secure exposure to Bitcoin for the traders. Most institutions will prefer the stability that comes with the ETFs. Therefore, the best chance with Bitcoin is a sustained institutional investment increase. This will in turn increase the value of the token for the long term.
Already, some experts like the Ark investment CEO, Cathie Woods are predicting that Bitcoin will hit $500k within the next five years. This can only mean that Bitcoin will retain its position as an ideal investment option.
Other than Bitcoin, the other digital currencies like Ether will also gain from institutional investments. Ether gains from the rising popularity of the Defi and the NFTs. As various institutions join the NFTs market, they invest in the platforms that push Ether into a mainstream token.
Most of the institutions even though had resisted digital currencies in the earlier days, now must have it in their portfolio. They are looking to have around 5% of their total investments in Bitcoin. This means increased Bitcoin value in the long run.