Bitcoin (BTC) price drops could trigger a surge of institutional investments that could drive crypto’s price upwards
Institutional investors are expected to buy during further Bitcoin price dips.
Wed, 31 Mar 2021, 06:42 am UTC
The crypto market rally has pushed Bitcoin’s price to heights as BTC set a new record above $60,000. In fact, the cryptocurrency’s price has already surged nearly 500 percent since October last year.
Nigel Green, founder and chief executive officer of the independent financial advisory deVere Group, believes that further Bitcoin price corrections could trigger more institutional investments into the crypto, International Investment reported. The CEO added that this deluge of funds could drive up BTC’s price permanently.
“It's likely that institutional investors are waiting for prices to dip a little further and are poised to significantly increase their exposure to crypto when they do,” Green said. “Should this happen, as we expect it will, we know that this will drive prices upwards.”
Green noted that inflows from institutional investors have been decreasing recently. “However, this momentum currently appears to be slowing down, with Bitcoin's recent consolidation sitting around $55,000,” he added.
Based on data from European digital asset manager CoinShares, net inflows for the week ending March 27 only totaled $21 million, according to Cointelegraph. This was the lowest level of weekly net inflows since October 2020 when BTC was trading below $14,000.
This slowdown could drive BTC’s price lower as some investors would likely opt to cash out. “The current slow-down, together with greater ongoing regulatory scrutiny, can be expected to prompt the herd-like mentality of many inexperienced investors who will now cash-out their Bitcoin, forcing the price temporarily lower,” Green explained.
However, this could be an opportunity for institutional investors to increase their exposure to crypto. “And this is when institutional investors, many of whom are just beginning to dip their toe in the crypto water, will likely dive in,” the deVere Group CEO said. “They will employ the ‘buy the dip' mantra.”
At this point, retail investors are likely to follow suit. “With them, they will bring their enormous capital, clout, and expertise to the market, and this will then prove to be another considerable confidence shot for even more retail investors,” Green said.
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