Goldman Sachs’ call covering bitcoin on Wednesday left the crypto community disappointed after they said that the largest cryptocurrency is not an asset class and they do not recommend it to their clients.
The report compared bitcoin with the Tulip mania from the 1600s and further argued that it is used for illegal activities and is prone to hacks. But the market trend showcases a completely different picture.
For starters, Bitcoin price jumped over 4% and went above $9,000 despite the negative remarks from the investment bank. BTC is continuing its upwards movement from yesterday and it makes its way to $9,400.
Also, institutional interest in the crypto market has been picking up lately with the open interest on bitcoin futures and options at CME Group hitting new highs. The volume on Deribit, the leader in the bitcoin options space, has been growing steadily as well.
Now, as per crypto enthusiast and independent researcher Kevin Rooke, since the historic halving event on May 11, Grayscale Investments have bought 18,910 BTC.
“Wall Street wants Bitcoin, and they don't care what Goldman Sachs has to say,” said Rooke.
What’s even more interesting is only 12,337 BTC has been mined since the halving which indicates a rapidly growing institutional demand for Bitcoin.
Technically, the BTC mined since halving till May 27th should be 14,400 because the event cut down the miner inflow in half, from 1800 BTC per day prior to halving to 900 BTC per day.
But the halving also caused a decline in hash rate and the time it has been taking to find the blocks increased from the regular 10 minutes to 14.3 minutes which is still sitting high at 10.4 minutes on May 26th despite the 6% downward difficulty adjustment to 15.14 terahashes per second. It was only today that the block time has fallen below 10 minutes. As such, the less number of newly minted BTC.
The week following the halving when issuance was cut in half, 6,300 new BTC were minted while Grayscale’s Bitcoin Investment Trust bought 12,021 BTC on $112 million in inflows.
“GBTC had a record $29.9M/week inflows in Q1. Hasn't been below $60M/week the past month,” shared Dan Elitzer.
As of Q1 of 2020, Grayscale was holding 1.7% of all bitcoin and this demand was driven by institutional investors, heavily dominated by hedge funds, at 88%.
At that time, Grayscale noted that “large increases in dollar-denominated inflows relative to Grayscale AUM have historically preceded market rallies.”