Search ForexCrunch
  • Bitcoin’s ascent has been engineered by big money flowing into the industry.
  • Many large investors refocus on Bitcoin as it is regarded as a better investment than gold or treasuries.

Bitcoin (BTC) has increased by over 11% on a weekly basis and gained more than 35% since this time in October. The price of the pioneer digital currency has recently been on the bullish quest, which is hardly surprising, considering the number of whales pouring their money into the market.

On November 5, BTC jumped above $15,000 and tested the area above $16,000 for the first time since January 2018. The cryptocurrency experts, including the popular crypto twitter analyst, aka Willy Woo, think the market partially owes its stellar growth to large traditional investors who started paying attention to the industry.

He believes that Bitcoin’s bull run is in progress as many high wealth individuals have been buying the rally recently.

Who’s behind Bitcoin’s bullish trend?

According to Woo, investor activity has been growing recently. Moreover, most of them are new investors, which is a positive sign for the cryptocurrency. 

The market is bubbling with new capital as wealthy traditional investors follow the suite of such behemoth like Square and MicroStrategy and seek to protect the capital by diversifying put their portfolio away from the traditional safe-havens like gold and Treasuries into Bitcoin.

Paul Tudor compares Bitcoin to a tech company at the early stage of the technology revolution. Speaking in an interview with CNBC, he noted that many smart people support Bitcoin and believe in the idea behind the technology, making it really valuable as a hedge against inflation and a store of value.

Jones also confessed that he had invested about 2% of his portfolio in the cryptocurrency as he sees a massive upside momentum in Bitcoin.

Bill Miller, a veteran investor and founder of Miller Value Partners, says that all major investment companies, including banks and asset managers, will have some exposure to Bitcoin. He put it in the same league with gold and other commodities that traditionally served as a protective asset.

The bitcoin story is very easy; it’s supply and demand. Bitcoin’s supply is growing at around 2.5% a year, and the demand is growing faster than that, and there’s going to be a fixed number of them, he said in the interview with CNBC on November 6.

JPMorgan experts say that institutional investors prefer Bitcoin over gold. They noticed that the substantial capital inflow into Grayscale’s Bitcoin trust coincided with the modest outflows from gold exchange-traded funds (ETFs) in October. 

This contrast lends support to the idea that some investors that previously invested in gold ETFs such as family offices, maybe looking at bitcoin as an alternative to gold, they wrote in the recent research note.

This development paves the way for a substantial price increase in the long run as the cryptocurrency will compete with gold as an alternative store of value. However, JPMorgan experts added that Bitcoin’s market capitalization would have to rise ten times from current levels “to match the total private sector investment in gold.”

Moreover, even a die-hard Bitcoin critic Nouriel Roubini recently admitted that the digital asset could be used as a store of value as it cannot be easily debased due to the algorithm that defines the supply of Bitcoins. The famous economist often referred to as Dr. Doom expressed his opinion in a recent interview with Yahoo.

Billionaire Stanley Druckenmiller is another guy who jumped the Bitcoin train recently. He transferred part of his capital to Bitcoin, as he believes that this asset is more profitable than gold or Treasuries. 

If the Gold bet works, the Bitcoin bet will probably work better, he said in the interview with CNBC.

Notably, a year ago, Druckenmiller claimed that he would stay away from digital assets as they were too risky. Instead, he preferred Treasuries in anticipation of a strong economic recovery. 

I’m a bit of a dinosaur but have warmed up to the fact that BTC could be an asset with a lot of attraction as a store of value… it’s been around for 13 yrs & with each passing day, it picks up more stabilization as a brand, he added.

While big money is flowing into the industry, the cryptocurrency enthusiasts increase their bets on Bitcoin’s sustainable rise to a new all-time high. Thus, Raoul Pal, Founder and CEO of Global Macro Investor and Real Vision Group, believes that Stan Druckenmiller’s involvement in Bitcoin buying has removed the obstacles for any hedge fund or endowment to invest.