Matrixport reveals the investor demographics driving the Bitcoin rally
Bitcoin surged hugely last week on the devastating news of the Silicon Valley Bank collapse, among others. This sent the digital asset soaring to a nine-month high above $28,000 before correcting lower. In its latest report, Matrixport reveals the investor demographics that drove the price rally.
The Americans control the Bitcoin price
In a new report, Matrixport head of research Markus Thielen reveals that US investors are actually behind the wild rally Bitcoin has seen since the start of the year. The researcher notes that while the digital asset is up around 66% year-to-date, the vast majority of those gains occurred during US hours.
To put this into perspective, BTC surged 47% during US hours compared to just 16% during Asian hours, and only 3% during EU hours. This means that US investors accounted for 71% of the total Bitcoin growth over the past year.
Zooming out to a two-week basis, the Americans once again outperformed their counterparts across the pond. In the last 11 days, the price of the digital asset rose by over 44% and one more Bitcoin rose over 31% during US trading hours, leaving around 13% for the rest of the markets.
US investors driving BTC price rally | Source: Matrixport
The increase in participation from American investors comes at a time when banks in the country are becoming increasingly unstable. As expected, investors have flocked to Bitcoin as a way to protect their wealth while also hedging against any impact the banking crisis may have on the economy.
Can BTC Continue to Rise?
Currently, the price of Bitcoin has corrected downwards, bringing it back to the $27,000 level. But this does not mean the end of the rally. Rather, it shows that investors are waiting for the FOMC announcement expected on Wednesday.
Matrixport predicts that the Fed will finally loosen its grip and slow the hike, given that the last two meetings have seen rates go from 75 basis points (bps) to 50bps and then to 25bps. So expectations are that Powell is likely to stick with another 25 bps hike.
BTC reclaims $28,000 once more | Source: BTCUSD on TradingView.com
Doing so would be very bullish for digital assets like Bitcoin and would likely lead to further upward momentum for them. Furthermore, inflation is also slowing and the Fed is already injecting new liquidity back into the market, giving investors more wiggle room to take risks.
“The new liquidity that the Fed provides through various forms will not find its way into the real economy and therefore inflation will not rise,” says the Matrixport report. “We are back to the good old days of (selective) asset rallies. Bitcoin is your best friend in this environment.”
In a previous report, Matrixport adjusted its price prediction for BTC. It expects the cryptocurrency to reach a price of $36,000 in the summer of 2023, while maintaining a year-end price target of $45,000 for Bitcoin.
