Bitcoin breaks through $19,800 today, institutional investors' moves become key to future trends

After a significant correction in the last few days of last week, the much-watched Bitcoin once again approached the $20,000 mark during the U.S. trading session on Monday, with data from multiple exchanges showing that it hit a record high. As for the subsequent trend, Bitcoin bulls generally believe that the increasing number of institutional investors buying this asset is an important basis for the current round of market trends being "different" from those in 2017.

According to Coinbase's quote, the price of Bitcoin hit a high of $19,873.23 on Monday, up 22.6% from last Thursday's low of $16,200. Multiple 2021 CME Bitcoin futures contracts once again broke through the $20,000 mark.

(Bitcoin weekly chart, source: TradingView)

Tyler Winklevoss, founder of virtual currency exchange Gemini and long-term Bitcoin bull, said in an interview on Monday that although he no longer increases his positions, he still believes that such assets still have huge room for growth. Tyler said that Bitcoin is impacting the market position of gold, and if this assumption is true, the market value target of Bitcoin may reach 9 trillion US dollars.

For more Bitcoin or US blockchain investors/speculators, the current focus is on whether the "tragedy" of the peak in December 2017 and the plunge to $6,000 two months later will happen again. Considering that Bitcoin has risen by 170% this year, large fluctuations up or down are "reasonable" trends.

For Bitcoin bulls, the significant changes in market participants are an important reason to support the continuous rise in prices. Compared with the retail speculation in 2017, there are more leading banks, hedge funds and family offices in the current Bitcoin market. The well-known investment bank Guggenheim submitted a regulatory document last Friday showing that the company's $5.3 billion Macro Opportunities Fund will invest up to 10% of its shares in the Bitcoin Trust.

In addition, the Bitcoin futures market also provided support for promoting institutional entry into transactions. In 2020, the average open interest of Bitcoin futures contracts on the CME Exchange reached 8,300, doubling from last year.

Influenced by Bitcoin's recovery of $19,000, the blockchain sector of the US stock market, which plunged last Friday, rebounded significantly. As of press time, MARA rose 31.79%, Riot Blockchain rose 21.44%, Bit Digital rose 18.67%, and Grayscale rose 17.76%. In contrast, Chinese concept stocks related to blockchain are in a state of general decline. Currently, Xunlei fell 3.03%, Canaan fell 9.50%, Renren fell 12.50%, and The 9 fell 11.45%.