Bitcoin has shown tremendous resilience this year, surging past $30,000, raking in over 80% in YTD gains. But data suggests that there could be more room for growth.
The flagship cryptocurrency surpassed major asset classes in an impressive turnaround from the market-wide rout just a year ago.
Bitcoin Outflows to Personal Wallets
Bank of America Corp.’s strategists Alkesh Shah and Andrew Moss observed that a net $368 million of BTC was sent to personal wallets in the week through April 4. Interestingly, this period witnessed 2023’s second-largest net bitcoin outflow from crypto exchanges.
The duo, in a note, highlighted that the trend of moving tokens from crypto platforms to their personal wallets typically means that investors are looking to hold them suggesting a waning sell pressure.
“Investors transfer tokens from exchange wallets to their personal wallets when they intend to hold them (or HODL), indicating a potential decrease in sell pressure.”
The BofA strategists also added that concerns regarding the US regulatory crackdown on crypto exchanges may have contributed to the outflow. For instance, bigwigs, including Coinbase and Binance, are facing major scrutiny from regulators in the country.
The latest surge has once again sparked conversation around Bitcoin’s potential as a store of value. Analysts previously underscored the crypto-asset’s resilience while pointing out that it has weathered two previous “winters” before the 2022 downturn. The turnaround in each case yielded exponential returns.
Recently, Bernstein analysts said that favoring gold but not bitcoin is irrational, comparing the preference to “hating on a faster horse.”
Bitcoin an “Escape Route”
Robert F. Kennedy Jr, for one, believes Bitcoin is an asset that could grant individuals an “escape route” amid the turmoil in the financial sector. The nephew of former President John F. Kennedy, who filed documents with the US Federal Election Commission on April 5 to run as a Democratic presidential candidate in 2024, presented himself as a Bitcoin supporter.
Kennedy also went on to blame President Joe Biden for “weaponizing” the regulatory agencies in the country, such as the DOJ, and the FDIC, to force certain banks to halt operations to crypto entities at the end of last year.