Bitcoin breaks through $34,000, institutional investors get on board to pump the price

The price of Bitcoin has skyrocketed from over $20,000 to $34,000 in just half a month, with market sentiment on the rise. Currently, Bitcoin's total market capitalization has entered the global top nine, second only to Alibaba.

Recently, Bitcoin's price has experienced a slight pullback, causing fluctuations in the mainstream cryptocurrency market. Among the top 50 digital currencies, 38 have seen a decline, with SUSHI experiencing the largest drop of 11.34%. Despite this, the overall market speculation remains high.

Behind the recent surge in the market, the entry of institutional investors and the issue of market supply are key factors. In the past 30 days, approximately 87954 Bitcoins have been withdrawn from exchanges, with a well-known exchange accounting for 84558 of those withdrawals. On January 3rd, the outflow of funds from this exchange reached a historical high in a single day, exceeding 3500 Bitcoins, which is speculated to be due to institutional buying.

Currently, 9 funds hold Bitcoin worth over 23 billion dollars. Holding coins has become the main investment strategy for various institutions. On-chain data analysts indicate that as institutional investors flood into the market, the liquidity of cryptocurrency exchanges is disappearing.

A large amount of Bitcoin has been transferred to custody wallet addresses, and the Bitcoin held by miners is also increasing. This has led to a reduction in market supply, driving prices up. However, the decline in market liquidity may pose a potential risk of a crash in the future.

Despite recent regulatory challenges faced by the cryptocurrency industry, there is still positive news. The U.S. Office of the Comptroller of the Currency has allowed federal banks to use stablecoins for payment and other activities, further consolidating Bitcoin's position as "digital gold."

The Financial Times reported on the front page on Monday, US time, that Bitcoin has broken through the $30,000 mark. The global market strategy head of a major investment bank stated that the long-term price target for Bitcoin could exceed $146,000 and might capture a portion of the market share held by gold in the future.

It is worth noting that on January 1st, the Bitcoin to gold exchange rate reached an all-time high, surpassing the peak during the 2017 bull market. The market generally expects the Bitcoin price to reach the range of $50,000 to $100,000, so let's wait and see.