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Market Musings

This Staggering Statistic Suggests It Isn't Institutions Driving Bitcoin's Price Up

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Published on:
February 17, 2021

Bitcoin's market cap has gone up $700 billion since September... but institutions have only bought $11 billion.

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JPMorgan has poured cold water over the narrative that institutional investors are fueling Bitcoin’s rally.

 

In a note to investors, the U.S. investment bank noted that just $11 billion of institutional money has flowed into BTC since September… yet the cryptocurrency’s market cap has surged by a staggering $700 billion over the same period.

 

Analysts said that, collectively, announcements from the likes of Tesla, Mass Mutual and Guggenheim only amount for 1.5% of the increase in Bitcoin’s market cap — adding that its possible “retail inflows have significantly magnified the institutional flow.”

 

JPMorgan went on to warn that current prices “look unsustainable” unless Bitcoin’s volatility subsides as a matter of urgency. The institution added:

“The US retail impulse has been particularly strong since January and there is little doubt that this retail impulse has been a driving force not only for equities, but also for Bitcoin.”

Of course, you could argue that institutions can take credit for adding more than just $11 billion in value, given how their acquisitions will have generated a lot of good PR for BTC.

Despite the fact that JPMorgan executives have admitted that they may have to get involved in Bitcoin one day, the bank has been considerably more cautious about Bitcoin than others.

 

When Tesla sensationally announced its $1.5 billion Bitcoin buy-in last week, JPMorgan strategist Nikolaos Panigirtzoglou said he was doubtful that other publicly listed companies would follow the electric vehicle maker’s lead in sizable numbers. Indeed, Microsoft President Brad Smith has told CNN that the tech giant isn’t planning to make a purchase.

 

That’s a stark contrast from Galaxy Digital’s Mike Novogratz, who confidently predicted that “every company in America” will soon have some exposure to Bitcoin.

 

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