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(1)Market Update - Asset manager Grayscale has bought more than 8,700 bitcoin in the past 24 hours. This bitcoin flows into the Grayscale Bitcoin Trust (GBTC),which is an investment fund that has more than $22 billion in storage.
Grayscale effect in the market
Grayscale is mainly targeting institutional investors, because you also need to be accredited to participate in the fund. A share in the GBTC follows the price development of bitcoin. As a depositor, you can benefit from a rising price without having to store the satoshis yourself.
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The spot price doesn't have to rise once Grayscale buys in, because they buy outside the spot markets. However, this reduces the stock of bitcoin, and that does affect exchanges.
Other important signals to read the market is the amount of capital stored in stablecoins. Think of Tether USDT, but also USDC from Circle, which is regulated in the US. Analyst Nic Carter draws a link between a rising price and the issuance of new USDC on the market.
Fundamentally, bitcoin is in a good place. The number of nodes (nodes) in the network continues to grow rapidly, while the computing power continues to increase. Bitcoin addresses with 1,000 bitcoin on it are also rising, that's over 2,400.
'Bitcoin price is in bubble'
But some say there are also risks. With bitcoin ( BTC) and a stock like Tesla there is a price bubble. We have to consider halving the price this year.
Scaremongering or not, according to half of the respondents in a Deutsche Bank survey. The bank surveyed 627 professional investors and fund managers about the state of certain financial markets. A whopping 89% think there is bubblein both bitcoin and the stock market.
56% of respondents believe that the bitcoin price will halve over the next 12 months. Sixty-two percent think the same thing is going to happen with the Tesla stock. This has increased even more in 2020 than the bitcoin price, which showed a big plus of 300% last year.
To get an impression of the type of respondents: half of those surveyed consider bitcoin an "extreme case", which they scale at '10' on a scale of 1 to 10.
But opinions in the sample differed a bit, as a quarter of respondents expected the bitcoin price to double in the coming year towards $70,000 each.
Funnily enough, two-thirds of those surveyed think the Federal Reserve should keep pushing money so that it continues to stimulate financial markets.
Liquidity shock
At the time of writing, the price of bitcoin is 32,914.36USD and we have hit below $34,000. In his technical video analysis, analyst John van Meer also talks about sellers appearing again.
Another risk is a liquidity crisis, as a lot of bitcoin is currently being taken away from exchanges. As a result, only 22% of the existing stock can be traded. The remaining 78% is owned by investors who hold, 'hodlen' in jargon.
A potential problem for exchanges, because they benefit from liquid markets with many transactions. Another consequence is that that bitcoin that is sold is bought up by virtually the same entities. In other words, certain wallets accumulate relatively more and those wallets get bigger.
As mentioned earlier, the number of addresses with 1,000 BTC grows.
Incidentally, the graph below from Glassnode again does not include the data of Grayscale, as podcaster Matt Odell keenly points out. The question is therefore is this is a reliable representation of reality.