Bitcoin price at generation low with institutions buying in droves
Cryptoanalyst Cred believes that bitcoin may have reached a generational bottom, which presents a good long-term buying opportunity holders.
On October 5, 2022, Fidelity Investments bought over $5 million worth of ETH for its institutional investors, not long after the New York Digital Currency Group raised $720 million for a bitcoin fund.
Crypto analyst Cred believes that while it’s a toss-up whether bitcoin has reached a so-called generational bottom, a long time horizon will mean you won’t regret buying at $20,000. However, Cred points out that the confluence of macro events such as the Covid-19 pandemic, a strong dollar and increasingly hawkish tightening by the Federal Reserve is affecting bitcoin’s price beyond traditional multi-year price cycles.
“Like how many times are these incredibly unique circumstances going to happen again where we get completely shut down and new economy from COVID, super inflationary crazy fiscal and monetary policy post-COVID? I mean, the sequence of events itself is so unfathomable that, realistically, we , you might only get one in your lifetime. And so it also presents an opportunity, especially if you can take a bit of a downturn.” he declared.
According to Fidelity, investors actually see an opportunity, albeit within the limits of their risk appetite.
“We have continued to see client demand for exposure to digital assets beyond bitcoin,” a Fidelity spokesperson said after the announcement.
The $5 million ETH purchase follows a $62 million fundraising for the company’s Wise Origin Bitcoin Index Fund. But it all started when quantitative digital asset trading firm Cambrian Asset Management bought $20 million worth of Bitcoin and Ethereum for investors on September 22, 2022. These investments, along with NYDIG’s fundraising, mark the first time in two years that institutional investors bought nearly $1 billion in crypto in a fortnight.
The current wave of investment may lead the broader market to believe that institutional investors have additional insight into how to survive a bear market.
While charts remained mostly flat between the 2020 and 2021 bull market and remain relatively stable, investment firms can now observe interest from institutional players who typically see crypto as a long-term part of their investment portfolios. These purchases do not move the price needle much, except in the case of “whales” buying large amounts of crypto, which usually do not include the demographics that the investment companies take into account.
However, as in previous bear markets, where others see largely flat price behavior in the second year of the bear market, the reality is likely to be a prolonged price rally culminating in a bull market.
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