The institutional investment momentum for Bitcoin is strong

In recent years, the Bitcoin market has undergone significant changes. Although the current Bitcoin price has retreated from the 2017 peak, the participation of institutional investors has greatly increased.

In 2020, the main driving factors for institutional funds flowing into Bitcoin included: the positive attitude of well-known investors, the increasing maturity of the Bitcoin network, and the continuously strengthening fundamentals.

The asset management scale of Grayscale Bitcoin Trust ( AUM ) is often regarded as an indicator of institutional investor participation. As of June 2020, its AUM exceeded $3.5 billion, nearly 20% higher than during the peak of Bitcoin prices in 2017. More notably, in the first quarter of 2020, as much as 88% of Grayscale's investments came from institutional investors, significantly higher than the 56% in 2018.

Large financial institutions have also changed their stance on Bitcoin. JPMorgan, which had previously held a critical attitude, recently changed its position, stating that Bitcoin "has strong momentum." The bank has also opened bank accounts for some cryptocurrency exchanges. Billionaire Paul Tudor Jones has also indicated that he has allocated 1% of his assets to Bitcoin.

The maturity of the Bitcoin network itself is also an important factor. Over the past year, the Bitcoin network's hash rate has increased from 57 million TH/s to 105 million TH/s. Even after the halving in May this year, the hash rate quickly recovered. This demonstrates the strong resilience of the Bitcoin network.

In addition, the decline in the reserves of cryptocurrency exchanges indicates a decrease in retail trading activity, and the influence of institutional investors may further increase.

Nevertheless, not all institutions are optimistic about Bitcoin's long-term prospects. Some institutions believe that Bitcoin's appeal lies solely in its high volatility.

Overall, institutional investors still have differing opinions on Bitcoin. Some view it as a mature store of value and a safe-haven asset, while others are skeptical about its growth prospects. Nevertheless, the market landscape for Bitcoin is changing, and its future trends are worth paying attention to.