According to a report by CoinShares, the bitcoin rally in the first half of 2019 was largely driven by institutional investors.
“Retail interest in Bitcoin is relatively tepid compared to 2017, and implies that the H1 rally was largely driven by the long-awaited entrance of institutional money”.
In fact, during the first half of 2019, the value of bitcoin rose from about $3,500 to annual highs above $13,500 at the end of June. However, unlike previous rallies, and in particular that of 2017, it seems that it was not the so-called “retail” investors who provided the capital needed to increase the prices.
CoinShares points out that four factors present during the 2017 race were clearly absent in 2019:
- the widespread attention of the media,
- the peaks in bitcoin searches on Google,
- the tweet peaks on Bitcoin,
- the corresponding altcoin rally.
These data do not allow attributing the 2019 rally to the many small, mostly non-professional investors, which means that the capital involved in the price increase must have come from major traditional and professional investors.
Moreover, in the absence of a real hype, it is also fair to assume that institutional investors are investing in bitcoin not only for mere speculative purposes but as a form of long-term investment in a growing technology sector.
“In summary, H1 2019 should be considered a wholly positive period in the development of this nascent industry”.
In addition, the report points out that behind the hype and speculation on these new emerging financial assets there are fundamentals, i.e. indicators that offer the opportunity to deepen the dynamics of the market, investment patterns and the overall development of these new technologies.
It should be noted that the rally in the first half of 2019 focused mainly on bitcoin, and much less on other technology projects with broader ambitions. This allows presuming that it was not only a matter of pure speculation but of targeted investments in this specific asset, not only for its technological characteristics but also for the financial ones.