This rally is driven by institutional investors - what are the implications?

[Oasisman]

What does it mean for Bitcoin? Will this bring us to some very high price levels, like hundreds of thousands, or are these experienced investors going to take the profits rather soon and crash the rally at barely establishing the new ATH, or in worst case, we won't even cross $20k. Can you say that institutional investors trade significantly differently from retail investors on a volatile and speculative market?

I somehow believe that the Btc price rally today was influenced by institutional investors. But, with a lot of bullish speculations about Btc reaching a 6 digit figure, I don't think these big investors are dropping their bags anytime soon. I mean we're close to $20,000 as of the moment. If you're holding a massive bag, I guess it would always be better to hold it for long term, and that doesn't mean to sell it once Btc gets ahead a few hundred bucks from the last ATH.

[carlfebz2]

What does it mean for Bitcoin? Will this bring us to some very high price levels, like hundreds of thousands, or are these experienced investors going to take the profits rather soon and crash the rally at barely establishing the new ATH, or in worst case, we won't even cross $20k. Can you say that institutional investors trade significantly differently from retail investors on a volatile and speculative market?

I somehow believe that the Btc price rally today was influenced by institutional investors. But, with a lot of bullish speculations about Btc reaching a 6 digit figure, I don't think these big investors are dropping their bags anytime soon. I mean we're close to $20,000 as of the moment. If you're holding a massive bag, I guess it would always be better to hold it for long term, and that doesn't mean to sell it once Btc gets ahead a few hundred bucks from the last ATH.

It depends and varies to someone because not all are holding for long term and some are really just aiming for gains on the shortest time as possible.

and for the reason of this rise then theres no doubt that institutional investors had already considered out on making such step on accumulating btc specially now that

it had been accepted by paypal and other big companies which might really be a go signal for those traditional investors that are still on doubts.

Implications? There would always be a sell-off and we should really be prepared for that.

[lixer]

I am not entirely sure if it is driven by them, but when you put billions of dollars into any market it would have some impact or another obviously. If you want to put this much money this quickly into some car rental sector, that would make that one go super high as well, it is not really shocking.

There are no implications and there are nothing that makes this more risky or better neither, it is just what it is and I think we just have to move on and continue. This doesn't mean to say that we don't need them, or they are irrelevant, it just means that it would have been like this anywhere else and they just picked crypto, that is it. This is why I believe it is quite important to say that these huge companies will probably keep coming here constantly and grow bigger and bigger, we just have to accept it.

[wxa7115]

This is a double edged sword so it could mean great things or it could mean horrible things for us. Maybe microstrategy or grayscale didn't bought all of those coins just to make a profit and sell and get out right away, maybe they got involved because they want to hold it as long as they can and try to make a profit, however that doesn't change the fact that they "could" do it as well if they want to.

What stops grayscale from selling hundreds of millions of dollars (is it a billion already?) crypto tomorrow? Is there a mechanism that stops them? There is none whatsoever. So, what we are saying right now is "they could destroy the market by selling a billion dollar worth of crypto but it wouldn't be profitable so they won't do it" and not they can't do it. Which is a bit scary but still we can't do anything about it but to just accept it.

True, but in what way is that any different than what we already have with exchanges, casinos or early adopters? The truth is the situation has not changed, all of those actors could dump their coins and crash the market if they wanted and yet they don't and that is because it is not on their best interests to do so, that is in fact one of the biggest disadvantages of being a whale, retail investors like us could lose a great deal of money if the market crashed but it is very easy for us to get out of it because our capital is small.

But for whales this is very difficult because even if they want to get out of the market because the price is going down or for whatever reason they need sell tens of thousands of coins to get out of their positions and that is not easy at all, this is just one more reason why I think that those two companies are in bitcoin for the long term.

[gentlemand]

Dunno about this particular rally but what we should be looking at is supply. Many of the coins bought by these types will never reach the open market again. They'll be held, privately traded or used as some sort of collateral.

Mining won't meet increasing demand so that means less floating around that's actually buyable. Every newcomer, be they a little man or institution, is going to build pressure on a shrinking pool of availability.

The really interesting bit, if institutions are balls deep by the time this bubble is ready to pop, is what happens on the way down. Will there be sustained scooping up in a way there wasn't before or will the dumpage be even more brutal? It's not as if any of them will have any emotional investment.

[exstasie]

The really interesting bit, if institutions are balls deep by the time this bubble is ready to pop, is what happens on the way down. Will there be sustained scooping up in a way there wasn't before or will the dumpage be even more brutal? It's not as if any of them will have any emotional investment.

I believe the Bitcoin market will become more like stocks over time, in the sense of thicker liquidity and therefore lower volatility. Like stock market crashes, the downside will still be brutal (-36% in the S&P 500 this past February-March was no joke) but institutions will be, at least to some degree, unloading near market tops and absorbing retail pressure near market bottoms.

Their lack of emotional investment (and deep pockets) are why they can fleece retail investors out of their investments time and time again. Retail investors are emotional and not well capitalized. They can't sustain deep and prolonged losses the way institutions can. I fully expect institutions to be scooping up "cheap coins" in any deep shakeout, or in the later stages of the next bear market.

[wxa7115]

The really interesting bit, if institutions are balls deep by the time this bubble is ready to pop, is what happens on the way down. Will there be sustained scooping up in a way there wasn't before or will the dumpage be even more brutal? It's not as if any of them will have any emotional investment.

That is an interesting question, I really think that those institutional investors really gave a thought to the scenario that you are presenting, if they decided to dump their coins they know there is not going to be enough demand in the market to absorb such a huge amount of coins and the crash is going to be brutal as you put it.

So there are only two strategies that I can imagine they can implement, one is to hold their coins no matter what, think about the long term and take the losses, the other option that they have is that instead of waiting for the crash to happen they decide to manipulate the market and begin to sell their coins slowly so no one notices it, then sell a huge amount of coins so the market begins to crash and then buy at an even cheaper rate.

[hatshepsut93]

Dunno about this particular rally but what we should be looking at is supply. Many of the coins bought by these types will never reach the open market again. They'll be held, privately traded or used as some sort of collateral.

Mining won't meet increasing demand so that means less floating around that's actually buyable. Every newcomer, be they a little man or institution, is going to build pressure on a shrinking pool of availability.

The really interesting bit, if institutions are balls deep by the time this bubble is ready to pop, is what happens on the way down. Will there be sustained scooping up in a way there wasn't before or will the dumpage be even more brutal? It's not as if any of them will have any emotional investment.

Available supply is low because there's lots of people hoping for new crazy high price, once something like that is achieved, the dumpening will start, and I don't think it matters whether institutions will be dumping or not, there will be enough selling pressure. Retail investors might be not active yet, but they are still easily the biggest group of holders, because who else was buying coins all these years? Many of us have witnessed the 2017 and 2013 bubbles, so we know it's better to sell and maybe rebuy later, instead of only hodling and regretting good opportunities with ATHs.

[peter0425]

Let's assume that it's like this article says and this rally is institutionally-driven. What does it mean for Bitcoin? Will this bring us to some very high price levels, like hundreds of thousands, or are these experienced investors going to take the profits rather soon and crash the rally at barely establishing the new ATH, or in worst case, we won't even cross $20k. Can you say that institutional investors trade significantly differently from retail investors on a volatile and speculative market?

What concerns me more is not the price they can bring but the effect and how long?because if this is really happening then it means market is manipulated and we are just being driven into our own grave?i dont like the sound of this if true and it seems that  market is not really healthy but just being fed.

[kapalmabur]

Let's assume that it's like this article says and this rally is institutionally-driven. What does it mean for Bitcoin? Will this bring us to some very high price levels, like hundreds of thousands, or are these experienced investors going to take the profits rather soon and crash the rally at barely establishing the new ATH, or in worst case, we won't even cross $20k. Can you say that institutional investors trade significantly differently from retail investors on a volatile and speculative market?

What concerns me more is not the price they can bring but the effect and how long?because if this is really happening then it means market is manipulated and we are just being driven into our own grave?i dont like the sound of this if true and it seems that  market is not really healthy but just being fed.

institutions buy Bitcoin not to trade, but to invest in it, you are wrong if institutions try to manipulate the market,
the market is only controlled by whales, there are indeed many Bitcoin holders in large numbers, this makes the market easier to manipulate,
but it cannot destroy Bitcoin, there will be people who buy, and circulation will be evenly distributed.

[BTCappu]

Implication that we are in safer hands right now. And I know that we have moved away from these same people to come to crypto and now we are working with them which is a sad fair of events. However that volatility caused by the decentralized liberal anarcho approach has caused bitcoin to be bought and sold very quickly almost all the time constantly.

When these companies get involved with something they buy it, and they hold it for years, maybe even decades, hell warren buffet has shares he owned to this day for the past 50 years. So, basically what this means is that, they are taking out bitcoin out of the market and they are putting it on their wallets which means there is even less bitcoin than it should be, which causes a new scarcity increasing the price.

[sana54210]

I really think that people not really preferring to sell bitcoin is not new, I mean there are tons of people in crypto world who do not want to sell as well, plus we have like what.. a million bitcoins gone because of satoshi? And tons of people who send money to him and his addresses which can't be retrieved for now as well, so there is really ton of reasons why we know bitcoin is something we do not want to use or spend or sell, we just want to get into bitcoin and never get out.

It means these companies will do that too obviously, I am not against it nor I do not want to prevent them from growing bigger, but we shouldn't be shocked when they come out and say they will never sell, unless something major happens, no long term investor would want to sell neither.

[Reatim]

Let's assume that it's like this article says and this rally is institutionally-driven. What does it mean for Bitcoin? Will this bring us to some very high price levels, like hundreds of thousands, or are these experienced investors going to take the profits rather soon and crash the rally at barely establishing the new ATH, or in worst case, we won't even cross $20k. Can you say that institutional investors trade significantly differently from retail investors on a volatile and speculative market?

According to the market reaction from Being pumped to $19,000 and drops to 16,000 yet not staying in 17,000 strongly .

My point is We still cannot make conclusion Until the value of Bitcoin and of course the altcoin Moves Either badly Down or Greatly UP,From those movement maybe we can finally answer if this really Driven by Institutional Investors or This is the effect of People entering crypto for Their own benefits,because we cannot deny that there are couple of reason why The Pump is literally Legit and not a Bubble.

[el kaka22]

There is no way we could know what their aim would be, I mean we can make some calculations and guesses and even predictions but none of them will be true.

Only because these companies do not know what they will do in the future themselves neither. They could say that they will never sell but something will happen that could make them sell and have no other option but to sell, or they could say they will sell when it is $30k, but when it is $30k they have enough money and support to continue.

So, I do not trust even them saying something themselves, hence we can never know what the implications will be neither, it is going to be totally random and will only really be something we just have to learn to live with. I doubt it would be that weird though, I mean total people who are not institutional but regular investors probably outweight the big companies when combined.

[freedomgo]

I mean total people who are not institutional but regular investors probably outweight the big companies when combined.

I'm not sure though, bitcoin marketcap is $300 billion now, but there are top holders of bitcoin like satoshi, Bulgaria, Bitfinex , FBI , The Winklevoss Twins

https://www.quora.com/Who-are-the-biggest-public-known-holders-of-Bitcoin-BTC

and probably more big institutions are holding, the thing is we cannot verify as everything is anonymous.

[cabron]

Eventually not just institutional investors will sell. Regular people who had bought a fraction of BTC and sees a profit will most definitely sell. The price will eventually saturate like being overbought and people dump but the price will likely be more than $20k probably even 3x than $20k. The only question I guess is if you are going to commit same mistake like you did in 2017 bullrun.