Bitcoin Rallies, Eyes Test of Record Highs as Red-Hot Demand Continues

  • Investing.com
  • Cryptocurrency News
Bitcoin Rallies, Eyes Test of Record Highs as Red-Hot Demand Continues
Credit: © Reuters.

By Yasin Ebrahim

Investing.com – Bitcoin climbed to near all-time highs Wednesday, on signs of rising long-term demand for the popular crypto as institutional interest continues to grow just as the currency takes aim at another record milestone.

Bitcoin rose 4.1% to $56,534, just shy of its record $58,335 set on Feb. 21.

Closely watched on-chain metrics that provide clues about support levels and user activity on the bitcoin network, or blockchain, continue to point to a healthy level of demand.

Rising outflows from bitcoin exchanges – a bullish on-chain indicator – pointed to an increasing number of traders moving their coins off exchanges to store in private wallets for a long duration. The outflows continued to increase near levels last seen since BTC made its prior peak above $58,000.

Coins began flowing out from exchanges to private wallets at a faster rate after bitcoin bottomed at about $45,200 in the wake of its recent sell off, according to data from CryptoQuant.

The underlying demand for bitcoin has been propped by a growing interest from institutional demand, with Goldman Sachs (NYSE: GS ) joining its peers like JPMorgan (NYSE: JPM ) to explore how it can meet growing client interest in bitcoin.

“We are regulated on what we can do. We continue to evaluate it ... and engage on it," Goldman Sachs President and Chief Operating Officer John Waldron said on Wednesday, according to Reuters. “Client demand is rising.”

But institutional demand has also spilled over to bitcoin mining that has helped the wider cryptocurrency ecosystem mature and reduced volatility, according to Canaan, a publicly listed provider of bitcoin mining hardware.

"Institutional investors’ renewed interest in bitcoin has manifested itself not only in their purchase of the underlying asset but also in their focus on bitcoin mining," Nangeng Zhang, CEO and founder of Canaan Inc (NASDAQ: CAN ) said in an email earlier this week.

"The resulting impact of greater institutional participation has been a positive one for cryptocurrencies at large — growing maturation of the industry, steady increase in prices, and reduced market volatility," Zhang added.

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