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Bitcoin’s recent momentum has caught the attention of Ark Invest, an investment firm specializing in disruptive technologies. The leading cryptocurrency has surpassed traditional assets, witnessing an impressive 80% climb against the U.S. dollar during the first half of 2023.
Ark Invest’s report highlights the surge in institutional interest, fueled by events like the filing of the Blackrock spot bitcoin exchange-traded fund (ETF). The researchers at Ark note that the balance of bitcoin on over-the-counter (OTC) desks, which serves as a proxy for institutional activity, has reached a one-year high. This increase indicates a growing focus on bitcoin among institutions and large capital allocators.
The report also emphasizes the strength of bitcoin holders and their impact on the cryptocurrency’s performance. Nearly 70% of the 19.4 million circulating bitcoins have not been moved in at least one year or more, solidifying the holder base. Ark Invest’s researchers highlight that this trend confirms a robust and committed group of holders.
Bitcoin’s positive trajectory occurs within a tightening cycle of unprecedented magnitude, according to Ark Invest’s report. The researchers discuss macroeconomic events, specifically conflicting fiscal and monetary policies in the United States, which raise concerns about a potential recession. For instance, the report points to a contraction in new manufacturing orders as a potential indicator of an impending downturn.
Despite the uncertain macroeconomic landscape, bitcoin has displayed resilience and strong technical support. The cryptocurrency has found substantial backing at its 200-week moving average, closing the month 14% above it. This performance demonstrates bitcoin’s ability to navigate turbulent times and maintain a positive trajectory.
Ark Invest’s report sheds light on the growing institutional interest in bitcoin, as evidenced by the surge in institutional activity and balances on OTC desks. Additionally, the report highlights the strengthening of the holder base, with a significant portion of bitcoin remaining untouched for extended periods. These factors contribute to the positive momentum and performance of bitcoin.