Institutional Investors' Bitcoin Buying Spree, Will It Be a Signal to Break $100,000?

▲ Bitcoin (BTC) ©Dasol Ko

Institutional investors are vacuuming up Bitcoin (BTC) from the market at a staggering five times the rate at which miners are generating new supply. In the past, accumulation of this magnitude has invariably led to powerful price surges, fueling peak expectations that an unprecedented bull run, potentially breaking $97,000, could unfold soon.

According to the cryptocurrency specialized media Bitcoinist on May 5 (local time), Charles Edwards, founder of Capriole Investments, recently highlighted the aggressive accumulation of Bitcoin by large capital through his social media. He analyzed the combined changes in holdings of corporate treasury assets and exchange-traded funds, which are key channels for indirect Bitcoin investment, to understand overall institutional investment trends.

According to data shared by the analyst, the recent rate of change in institutional investors' total Bitcoin holdings has surged vertically, indicating a large influx of capital into the market. Buying pressure has exploded in both corporate treasury asset acquisitions and the exchange-traded fund market, strongly boosting the overall scale of institutional accumulation.

Notably, the current intensity of institutional buying has far exceeded the new supply generated by the Bitcoin network. Charles Edwards explained that institutions are absorbing more than 500% of the new Bitcoin supply mined daily. While the rate of Bitcoin supply generation has halved after the halving event, the appetite of large capital has exploded, making a severe supply shock visible.

The expert emphasized that in the past, whenever institutional buying reached this level, the Bitcoin price invariably saw a strong uptrend. According to his explanation, looking back at previous cases, the average return over one month after such large-scale accumulation was 24%. If the same historical pattern repeats this time, calculations suggest that the Bitcoin price could soon surge vertically to the $97,000 mark.

However, the market's attention is focused on whether this explosive buying spree will continue. Whether the current steep accumulation trend will continue unabated, or if it will remain a short-term phenomenon like in March and enter a period of consolidation, is emerging as the biggest factor determining the future direction of Bitcoin's price.

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