During the U.S. election, Bitcoin prices hit record highs.
According to the market, Bitcoin once approached the $16,000 mark on the morning of November 6, with an increase of over 100% during the year, constantly refreshing the highest price since January 2018.
Not only that, traditional institutions have entered the market one after another, “coin hoarding” activities have become more frequent, and technical indicators tend to be bullish… a series of positives seem to be brewing a bigger bull market.
In fact, the important driving force for the increase in Bitcoin price this year is the entry of incremental funds, especially the continuous purchase of giants such as Grayscale, MicroStrategy, and Square, which not only injects more liquidity into the entire crypto market, but also triggers it globally More attention and discussion.
This article mainly analyzes the market dynamics and influence of several giants to help everyone better understand the important driving forces of the Bitcoin market.
Top1: Grayscale
Influence: ☆☆☆☆☆
In the crypto market, Grayscale is a special existence. No matter the market goes up or down, it continues to buy. It is a well-deserved “Bitcoin Whale”.
As we all know, Grayscale is the world’s largest crypto asset management company. It was founded in 2013 by the “investment predator” DCG Group, and it mainly serves institutional investors.
According to the official website, the company’s products are divided into single asset trusts and multi-asset portfolio funds. The former has 9 products, including Bitcoin trusts and Ethereum trusts, and the latter is a grayscale digital large fund (Grayscale Digital Large). Cap Fund), which contains crypto assets with top market value such as Bitcoin and Ethereum.
According to the AICoin index, on November 4th, Eastern Time, Grayscale Bitcoin Trust’s holdings increased by 7809 BTC, and the total holdings reached 490,345 BTC. This is the 16th consecutive working day since October 14th, with a cumulative increase of 41,896 BTC.
While continuing to “scan goods”, the total scale of Grayscale Asset Management has exceeded US$8.6 billion.
Thanks to these data, grayscale frequency has frequently become the focus of major media reports, which in turn will help it attract more institutional investors.
Of course, the target display of gray scale is more than that. In the process of continuing to buy, the company is still strengthening its research on encrypted assets and continuously outputting guiding report content.
Taking the recently released “Rise of Bitcoin and Digital Gold” as an example, the company pointed out: “In history, gold played a central role in an economy powered by material exchange, but the world we live in today is a digital world. With the development of our currency and payment system, Bitcoin may replace gold and become the ultimate store of value asset.”
Continue to buy + internal and external propaganda, the influence of Grayscale in the crypto world continues to increase, and this may in turn bring greater imagination to the Bitcoin market.
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For institutional investors, in addition to focusing on stable income, they also consider the compliance of the investment target. Grayscale clearly understands this, so it actively embraces supervision. Since this year, the company’s Bitcoin Trust and Ethereum Trust have been approved by the US SEC.
Also note that Barry Silbert, the founder of Grayscale, is an authenticated believer in cryptocurrency. In an interview with the media, he bluntly stated that he is firmly optimistic about the future of cryptocurrency, and it will become clearer for institutional investors to enter the cryptocurrency market. “Institutional investors are gradually getting deeper into this position. They have not invested in real money. I think the topic of everyone’s discussion has changed from whether Bitcoin is a poison, a rat warehouse or digital gold to how investors should be in the field of cryptocurrency. For correct asset matching, how to allocate funds accordingly.”
It is foreseeable that under the leadership of Barry Silbert, Grayscale will continue to advance in the crypto market, and this will continue to attract more incremental users and funds.
Top2: Square
Influence: ☆☆☆☆
On October 8, Square, a payment company founded by Twitter CEO Jack Dorsey, announced that it had purchased 4,709 bitcoins for US$50 million (that is, an average of US$10,600 per bitcoin). As of the second quarter of 2020, this investment accounted for almost 1% of the company’s total assets.
The company said in a statement: “Square believes that cryptocurrency is a means of economic empowerment and provides a way to participate in the global currency system, which is in line with the company’s mission.”
Square’s move has not only received the attention of the crypto world, but also the support of traditional institutions. JPMorgan Chase stated in a recent report that Square’s announcement of an investment of $50 million in BTC is a “strong vote of confidence in the future development of Bitcoin”, which also shows that the payment company believes that Bitcoin has great potential as an asset. Although Square’s $50 million investment is dwarfed by the $425 million invested by MicroStrategy, JP Morgan Chase said Square may make more purchases.
In fact, Square has been active in the Bitcoin market since 2018. At that time, Square’s “U.S. version of Alipay” Cash APP already supported Bitcoin purchase transactions.
In May of this year, Cash App added a fixed-investment bitcoin service, allowing users to set the frequency of buying bitcoins daily, weekly or biweekly, with a minimum purchase amount of $10.
According to crypto analysis company Messari, payment giant Square has purchased approximately $1.5 billion worth of bitcoin in the past 12 months to promote a large number of customer demand on its mobile app.
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While silently increasing Bitcoin holdings, while providing convenient access for incremental users, Square has contributed to the promotion and application of Bitcoin.
This can also be seen from Square’s influence in the crypto world. On the evening of October 8, after the company announced that it had purchased 4,709 bitcoins, BTC, which had been sluggish for many days, rose by 2%. Many cryptographers have also participated in Twitter interactions.
Of course, I have to mention Jack Dorsey, Square founder and Twitter CEO, behind the scenes of Square, an out-and-out Bitcoin believer.
In his view, digital currency will replace the dollar’s dominance in the global financial field and become the world’s main payment currency. This change may occur in 10 years or less.
Over the years, he has not only continued to invest and trail Bitcoin, a self-help Bitcoin developer, but also made Twitter an important position for the spread of encrypted information.
More importantly, Square, owned by Jack Dorsey, is becoming an important channel for more and more ordinary people to contact and own Bitcoin, which is particularly critical for the large-scale adoption of Bitcoin.
Top3: MicroStrategy
Influence: ☆☆☆☆
In August of this year, MicroStrategy, a Nasdaq-listed business intelligence company, officially announced that the company has bought a total of 21,454 bitcoins with a total value of approximately $250 million.
A month later, MicroStrategy announced that it would once again increase its Bitcoin holdings, buying Bitcoin worth $175 million.
Two times before and after, MicroStrategy has invested about 425 million U.S. dollars and holds 38,250 Bitcoins.
Although MicroStrategy holds a small number of coins compared with Grayscale, it has also attracted widespread attention from the crypto world, because MicroStrategy is the world’s largest independent BI (Business Intelligence) company, and its aggressive entry means that Bitcoin is entering Another important step has been taken in the mainstream world.
Interestingly, the founder of MicroStrategy Saylor was skeptical of Bitcoin, but has now become a Bitcoin “iron fan.” According to him, he had purchased 17,732 bitcoins as personal assets before the company bought bitcoins.
What drives Saylor’s change in concept is in-depth research on many asset classes. He found that all the opportunities that can rise 10 times have in common: 1. Has achieved a market value of more than 100 billion US dollars; 2. When the scale is ten times that of the next largest competitor.
Looking at the market, Bitcoin is undoubtedly the best choice, because its scale is far more than 100 billion US dollars, more than 50% of the total market value of the crypto market, and more than 10 times that of other cryptocurrencies (excluding ETH).
This methodology not only convinced Saylor, but also won the support of the company. According to Saylor, the decision to invest in Bitcoin was made after discussions between the board of directors and the company’s investors, auditors, and executives. “This is not speculation or hedging, but a strategy formulated by the company after careful consideration.”
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The purchase of Bitcoin by NASDAQ-listed companies is extremely topical in itself. It has not only been reported by industry media, but even traditional media such as the Wall Street Journal have also shown greater interest-Bitcoin has once again entered the mainstream view.
From the timing of entry, although MicroStrategy is a latecomer, it does not prevent this listed company from obtaining high returns.
According to data released by crypto researcher Kevin Rooke, in the past three and a half years, Microstrategy has only received $78 million in net income from its business operations, and its recent gains from Bitcoin investments have exceeded this data.
This is indeed the case. If calculated according to the total amount and quantity of bitcoins purchased by Microstrategy, the average purchase price of each bitcoin is about 11,100 U.S. dollars, and now the price of Bitcoin exceeds 15,000 U.S. dollars, the company’s return on investment has exceeded 150 million US dollars.
The first time you enter the market, you will taste the great sweetness. Any company or individual will take Bitcoin with admiration. In an interview, Saylor stated that he would hold his company’s Bitcoin for 100 years and did not intend to sell it.
However, looking back at the development of MicroStrategy, many people believe that the company is hitting hot spots, because since the burst of the Internet bubble, its stock price has been on a downward trend, and after the announcement of its investment in Bitcoin, the stock price has unexpectedly increased.
In any case, traditional listed companies’ support of Bitcoin is a good thing for the industry itself. As for whether it is a hot spot, you may as well leave the answer to time.
Top4: Stone Ridge Holdings
Influence: ☆☆☆
In October of this year, the asset management company giant Stone Ridge Holdings Group announced that it had purchased more than $100 million in Bitcoin through its subsidiary, the New York Digital Investment Group (NYDIG), which manages more than $10 billion in assets, mainly for use as a treasury reserve. assets. This is the third giant company to bet funds on the Bitcoin market after MicroStrategy and Square.
Ross Stevens, founder of Stone Ridge Holdings Group and founder and CEO of NYDIG, said: “I think Bitcoin will always be the ultimate unknown force. Bitcoin can promote global citizens to choose a brighter and fairer financial future. From an investment perspective. Look, we have long believed that Bitcoin is better than cash.”
In his view, as the current global situation develops, Bitcoin is a better investment choice: “Today, with the unchecked and uncontrolled printing of money around the world, the return on real assets is gradually becoming negative. SRHG’s 10,000 Multiple BTCs have become a major part of our treasury reserve strategy.”
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Compared with Grayscale and Square, although Stone Ridge has not reported much in the encryption field before, its influence cannot be underestimated. It is reported that the over 100 million U.S. dollars in Bitcoin hosted by NYDIG on behalf of Stone Ridge is only part of NYDIG’s digital assets valued at over one billion U.S. dollars for clients.
According to Forbes, the two largest funds currently managed by NYDIG are Institutional Bitcoin Fund LP (US$190 million) and Bitcoin Yield Enhancement Fund (US$140 million). In the past 10 months, its number of customers has quadrupled.
In the future, what can be expected is that the scale of digital asset management under Stone Ridge will continue to expand, playing a similar gray-scale role, and continuously attracting more institutional investors to the track.
