According to Ryan Rasmussen, the research supervisor of Bitwise, sovereign wealth funds may be selling gold and turning to buy Bitcoin (BTC). An important signal is that in a survey of 15 large institutions, none of them sold their holdings during the period when Bitcoin's price fell from $125,000 to $60,000. This indicates that, especially among institutional investors, confidence in Bitcoin is quite strong.
In fact, the report indicates that institutions are selling gold and buying Bitcoin ( BTC ) as a tool to hedge against currency devaluation. Below, we discuss whether Bitcoin is about to experience another round of significant gains.
After institutions sell gold and buy more Bitcoin, will Bitcoin rise again?
Bitcoin (BTC) has seen two significant rises recently, one in late August and another in early September. The asset once surpassed $87,000 again, but failed to break through $90,000. Subsequently, BTC fell back to around $83,000.
The driving factors behind these two rounds of gains include President Trump's cryptocurrency events held at the White House, as well as the U.S. Treasury Department's increased bond repurchases. However, high inflation has led to rising interest rates, and higher interest rates typically suppress risky assets.
In the coming days, Bitcoin ( BTC ) may continue to trade sideways. The conflict between the United States and Iran seems to show no signs of ending, and relevant agreements have not yet been finalized. There was previously hope for a ceasefire, as Iran stated that it would open the Strait of Hormuz within a week if its demands were met. If the war continues and oil prices remain high, inflation could become a major issue. In such a scenario, it is unlikely that Bitcoin ( BTC ) will rise.
At the same time, many analysts remain bullish on Bitcoin ( BTC ). Bernstein predicts that BTC will once again exceed $100,000 by the end of this year. If BTC reaches $100,000, it could trigger another round of bull market in the broader cryptocurrency market. However, there is also a possibility that BTC may not rise but fall instead, with a correction occurring as economic concerns intensify.
