Institutional inflows in Bitcoin (BTC) continue to grow at a faster rate. Just two days after banking giant State Street announced its crypto services, another $40+ billion asset manager GoldenTree has announced its investment in the world’s largest cryptocurrency.
As a result, the Bitcoin (BTC) price is up 5% today shooting all the way to $42,000. At press time, Bitcoin is trading at a price of $41,932 with a market cap of $787 billion. This also comes amid strong Bitcoin outflows and rising network activity on the Bitcoin blockchain.
Steven Tananbaum, the chief investment officer at GoldenTree said that this is certainly a big move for the credit-focused company. As first reported by The Street,
The New York-based firm has been adding Bitcoin to its balance sheet as a diversifier for the broad mix of debt-focused strategies it has run for years, according to two sources with knowledge of the matter. The sources were granted anonymity to discuss sensitive business dealings.
With big players continuing with their accumulation, the Bitcoin community has kept its hopes alive amid the recent BTC price volatility and consolidation.
The Rising Institutional Interest for Bitcoin
The regulatory environment is maturing and thus institutions are hopeful that Bitcoin is here to stay. Moreover, looking at the current global macros, inflation is taking a tall in the post-Covid pandemic recovery.
Thus, institutional players are looking for asset classes that can deliver returns beating inflation. Looking at the way Bitcoin and other cryptocurrencies have performed, this remains a smart fit. Bitcoin (BTC) has managed to deliver over 200% compounded returns over the last decade.
However, the percentage of institutional exposure into the crypto asset class is let for now. Like institutions just put 1-5% of their extra cash into Bitcoin or other digital assets.
Business intelligence firm MicroStrategy has been massive accumulating BTC over the last year and holds more than 100K Bitcoins on its balance sheet. During its Q2 2021 results announcement, it noted that its will continue with the Bitcoin strategy.
Furthermore, Germany has introduced a law that allows institutional players to invest up to 20% of their assets in digital currencies. This law is coming into effect starting August 2 next week. Thus, we can expect more such announcements in the coming week.