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Rising Institutional Demand Boosts Bitcoin's Price Surge Fueled by U.S. Investors
JPMorgan's research report on Thursday revealed that the increased regulatory scrutiny in the United States has prompted American crypto firms to explore opportunities overseas.
“The U.S.-based arm of Binance has called off its deal with Voyager, while Coinbase launched Coinbase International, a crypto derivatives exchange outside the U.S., as a proactive measure in response to rising U.S. regulatory pressures,” analysts led by Nikolaos Panigirtzoglou wrote.
JPMorgan stated that the regulatory crackdown has created additional pressure on crypto companies. However, what's more concerning is the lack of clarity on critical matters, including whether Ether (ETH) is classified as a security. This ambiguity will inevitably affect the demand and liquidity of the cryptocurrency.
The regulatory clampdown has also “deterred institutional investors from engaging with crypto,” and because of this investors have been buying gold rather than bitcoin (BTC) as a hedge against a potential “catastrophic scenario” in the wake of the collapse of Silicon Valley Bank, the note said.
According to the bank, the surge in Bitcoin's value this year seems to have been fueled by individual investors rather than institutional ones. The leading cryptocurrency has increased by 76% year-to-date.
The report stated that Bitcoin Ordinals has also contributed to the strong performance of Bitcoin. This new protocol enables the storage of non-fungible tokens (NFTs) on the Bitcoin blockchain.
Source Coindesk
