Matrixport Reveals The Investor Demographic That Is Driving The Bitcoin Rally
Bitcoin has recovered tremendously in the past week, due to the devastating news of the collapse of the Bank of Silicon Valley, among others. That sent the digital asset climbing to a nine-month high above $28,000 before correcting back lower. In its latest report, Matrixport reveals the investor demographics that drove the price spike.
Americans Are Driving Bitcoin Price
In a new report, Matrixport’s head of research Markus Thielen reveals that US investors are actually behind the wild rally that Bitcoin has seen since the beginning of the year. The researcher notes that while the digital asset has grown by around 66% year-to-date, the vast majority of these gains have occurred during US time.
To put that in perspective, BTC is up 47% during US business hours, compared to just 16% during Asian hours and just 3% during EU business hours. This means that US investors accounted for 71% of Bitcoin’s total growth last year.
Zooming in on a two-week basis, the Americans once again outperformed their counterparts across the pond. Over the past 11 days, the price of the digital asset has risen over 44% and one more, Bitcoin has surged 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 US investor participation comes at a time when the country’s banks are increasingly unstable. As expected, investors flocked to Bitcoin as a way to protect their wealth while hedging against possible impacts the banking crisis could have on the economy.
Can BTC continue its rise?
Currently, Bitcoin price has corrected downwards, bringing it back to the $27,000 level. But that doesn’t mean the end of the rally. Instead, it shows that investors are waiting for the FOMC announcement expected on Wednesday.
Matrixport predicts that the Fed is finally relaxing and slowing down on its hikes, as the last two meetings saw interest rates move from 75 basis points (bps) to 50bps and then to 25bps. Therefore, expectations are that Powell is likely to maintain another 25bps increase.
BTC reclaims $28,000 once more | Source: BTCUSD on TradingView.com
Doing so would be very bullish for digital assets like Bitcoin and likely result in even more momentum for them. In addition, inflation is also coming down and the Fed is already pumping new liquidity into the market, giving investors more room to take risks.
“The new liquidity that the Fed is providing in various ways will not find its way into the real economy and therefore inflation will not pick up,” says the Matrixport report. “We are back in 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. He 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.