Bank of America Corp strategists have suggested that Bitcoin’s impressive rally in 2023 could potentially continue if we consider the flows between cryptocurrency exchanges and personal digital wallets, according to a report by Bloomberg. The strategists, Alkesh Shah and Andrew Moss, noted that there was a net outflow of the second-largest amount of Bitcoin from crypto exchanges this year during the week ending on April 4. Additionally, during the same period, a total of $368 million worth of Bitcoin was sent to personal wallets.
The strategists further added that the recent exodus from crypto exchanges could be attributed to concerns arising from the regulatory crackdown on digital-asset platforms in the US. Bitcoin’s surge so far this year has surpassed that of major asset classes, triggering a contentious debate about the reasons behind the token’s recovery from the 2022 slump.
Bitcoin has surged above $30,000 this week, marking the first time it has done so since June 2022. The cryptocurrency’s value has increased by over 80% since December 31st, outperforming the Nasdaq 100 tech index, which saw a gain of 19%. Gold, on the other hand, has only risen by around 9%.
Despite the downfall of FTX and other crypto firms and aggressive actions by US regulators, digital tokens have experienced a surge in value in 2023. However, this rally has occurred in a market that has seen a decrease in liquidity and trading volumes following the bankruptcies of these companies.
The Bank of America strategists have stated that the recent rally in Bitcoin’s price could be supported by hoarding after the surge. This trend has been observed in the past, where investors hold onto their assets in anticipation of a price increase. However, it remains to be seen whether this trend will continue in the future.
The surge in Bitcoin’s price has been attributed to a number of factors, including increased institutional adoption, the growing popularity of non-fungible tokens (NFTs), and the overall bullish sentiment in the market. Additionally, the recent approval of a Bitcoin ETF by the SEC has also contributed to the surge in price.
Despite the positive sentiment surrounding Bitcoin, there are still concerns about the regulatory environment for cryptocurrencies. The SEC has been cracking down on digital-asset platforms, and there is still uncertainty about the future of cryptocurrencies in the US. However, many experts believe that the recent approval of a Bitcoin ETF is a positive sign for the future of the industry.
In conclusion, the recent surge in Bitcoin’s price has been supported by a number of factors, including hoarding after the surge, institutional adoption, and the growing popularity of NFTs. While there are still concerns about the regulatory environment for cryptocurrencies, many experts remain bullish on the future of the industry. As always, investors should exercise caution and do their own research before investing in any asset.