Fred Krueger, an investor and crypto analyst, is predict a “vicious” Bitcoin (BTC) rally coming soon. He points to the recent unprecedented accumulation of the coin by Wall Street heavyweights.
This surge in institutional interest coincides with the U.S. Securities and Exchange Commission (SEC) recently approving the first spot Bitcoin ETFs.
Wall Street increases Bitcoin purchases
In a post on To illustrate, the analyst noted that Fidelity was purchasing around 4,000 BTC daily.
Related Reading: Bitcoin Goes to the Doctor: 5 Key Metrics for BTC in 2024
On the other hand, Krueger continued, Ark devours more than 1,500 BTC every day. BlackRock, the world's largest asset manager, has not yet disclosed its Bitcoin holdings. However, based on the accumulation rate of Ark Invest and Fidelity Investment, BlackRock is likely buying coins faster. So far Lookonchain data puts BlackRock's IBIT holdings of BTC are over 44,000.
ETF funds buy BTC | Source: Lookonchain
If anything, the rate at which these Wall Street institutions are doubling their Bitcoin holdings is an overall positive price increase. Notably, demand for BTC remains high even more than a week after the US Securities and Exchange Commission (SEC) approved the top spot for Bitcoin ETFs. The fact that they are buying steadily suggests that institutions are optimistic about Bitcoin's potential.
The increased pace of BTC accumulation lasts less than three months before the network halves its miner rewards. The Bitcoin halving in early April will see miner rewards drop from 6.25 BTC to 3.125 BTC. If past price action is any guide, the resulting supply shock could trigger another wave of higher highs, even pushing prices above the 2021 highs of $69,000.
BTC Falls, FTX Unloads Millions of GBTC Shares
Despite the general optimism, BTC is still struggling. Days after spot Bitcoin ETF approval, BTC saw a downtrend and lost double digits. On January 23, it even temporarily fell below $40,000 before recovering back to the spot price.
Bitcoin price trending down on daily chart | Source: BTCUSDT on Binance, TradingView
Analysts attribute the selloff to FTX, the defunct crypto exchange, leaving the Grayscale Bitcoin Trust (GBTC) worth an estimated $1 billion. As FTX Estate sells its shares of GBTC, prices are expected to stabilize as the unique selling event weakens and institutions double their exposure and purchase more BTC at spot prices.
Observers also note that GBTC outflows were offset or even exceeded by the increase in inflows into other funds, mainly BlackRock's ETF product.
Feature image from Canva, chart from TradingView
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