Binance, increased institutional investment in crypto in 2022

According to the Binance report on crypto investments, institutional demand has been growing in the first quarter of 2022.

Binance confirms an increase in institutional investors in crypto

Institutional interest in cryptocurrencies continued to increase during the first quarter of 2022, regardless of market volatility. This is perhaps one of the most interesting findings from the latest market report from exchange Binance.

Prominent investment banks, such as US-based Jefferies, Canaccord Genuity and Switzerland’s Credit Suisse have decided in recent months to form teams of experts, dedicated to exploring new technological developments in the blockchain ecosystem. 

Meanwhile, some of the most important American technology companies, including Google, Uber, Twitter, AMC and PayPal, have opened up to the possibility of accepting cryptocurrencies as a form of payment.

A recent survey by Goldman Sachs suggests that, sooner or later, more and more companies will be virtually forced to accept cryptocurrencies. 

The multinational investment bank revealed that more than 60% of its clients plan to increase their exposure to digital assets, which could lead to Bitcoin taking further market share over gold.

The firm anticipated that a breach of the $100,000 threshold could place BTC in command of 50% of the so-called “store of value” market.

South Korea’s largest bank, Kookmin Bank, recently developed a plan to introduce a cryptocurrency exchange-traded fund and cryptocurrency derivative products. These instruments aim to allow “market participants to hedge market events with greater precision and flexibility”.

Crypto demand worldwide

According to Binance’s experts, the growing interest in cryptocurrencies is also confirmed by the increasing demand from government authorities around the world for new market regulations.

The US appears to have adopted a new approach to regulating digital assets as the blockchain industry grows by “leaps and bounds”. 

President Biden issued an executive order on crypto in February. The clear aim would be to establish a first federal-level strategy on digital assets in the country.

The Bank of England has begun to outline a regulatory framework for cryptocurrencies. Advertising Standards Council of India issued the first guidelines for cryptocurrency-related ads earlier this year.  

Similarly, lawmakers in Panama have begun exploring cryptocurrency regulation and Georgia has drafted legislative changes that include registration, licensing, compliance testing and anti-money laundering rules for cryptocurrency companies.

Large cryptocurrency investors have shown a build-up approach to Bitcoin in the first quarter of 2022, accentuating a likely bullish push for the near future.

MicroStrategy bought 660 BTC for about $25 million in cash, Luna Foundation Guard bought 42,410 BTC, El Salvador acquired 410 BTC and even US Senator Ted Cruz made a Bitcoin purchase worth about $50,000.

In addition, the professional services firm KPMG in Canada has allocated Bitcoin and Ethereum to its corporate treasury. The mayor of Rio de Janeiro, Eduardo Paes, has also revealed plans to invest 1% of the city’s treasury reserves in cryptocurrencies. 

The mayor of New York, Eric Adams, and the mayor of Miami, Francis X. Suarez, have said they want their compensation paid in Bitcoin.

Bitcoin and Ethereum, the market reaction

Transaction history from the spot markets shows that during the first quarter of 2022, Bitcoin appears to have built support around $41,000, where around 6 million addresses bought over 3.21 million BTC. 

Bitcoin seems to have been hovering around support at $41,000 and resistance around $47,400 for months. These two important levels could play a key role in the coming quarters to understand what the future trend of Bitcoin could be in the coming months.

A strong quarterly close below support could trigger selling among investors, leading to a correction towards $30,000 or below. 

If BTC breaks through resistance, investors could be encouraged to return to the market en masse, leading prices to touch $60,000 again, and then attempt to rally towards new all-time highs.

As for Ethereum, after declining in February to just over 70,000 new daily addresses in March there has been a steady growth in new addresses, averaging 85,132 new addresses per day.  

The steady recovery of this on-chain metric suggests greater user adoption over time, which would preclude a likely price increase, also linked to the upcoming release of the highly anticipated new Merge update, which should make the blockchain more scalable, affordable and sustainable.