Why Microstrategy’s BTC purchase may open institutional flood gates

• MicroStrategy adds to its Bitcoin portfolio with the latest $347 million purchase.
• BTC addresses holding over 1,000 BTC started buying BTC showing confidence in the coin. 

Bitcoin [BTC] might be about to experience a wave of institutional liquidity inflows. Multiple factors including regulatory uncertainty have kept institutional investment at bay but that might be about to change thanks to MicroStrategy.

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Most institutional investors have notably stayed away from Bitcoin and altcoins after the events that caused the 2022 crash. However, MicroStrategy founder Michael Saylor just announced that his company just purchased 12,333 BTC valued at $347 million.

This was a significant development for the Bitcoin community because might mark the return of institutional interest in the cryptocurrency.

MicroStrategys’s latest Bitcoin purchase represented an important development for the crypto market. This is because it might encourage more institutional investors to jump on board. This is not the only latest development that underscores an improving environment for institutional investors.

Ledger, the company behind the Ledger cold storage wallets  announced the launch of Ledger Enterprise TRADELINK. The latter is a new solution designed for institutional crypto investors. In other words, Ledger’s new product is designed to cater to the needs of institutional users.

The Ledger development further adds to the list of observations currently supporting a more attractive crypto environment for institutions. The timing of these developments also aligns with the hopes of institutions jumping back onto the Bitcoin train through the recently filed ETFs.

Ledger’s new offering is particularly interesting from the ETFs perspective. This is because it will make it easier for institutions to purchase Bitcoin in a self-custody manner even if the ETFs get shot down again.

Will Bitcoin benefit from these developments?

There is no doubt that the above developments are important for Bitcoin. For starters, MicroStrategy’s recent Bitcoin acquisition just added over $300 million to Bitcoin’s marketcap. Such a large purchase is enough to support a higher floor price. But more importantly, it has the potential to boost investor confident especially combined with other bullish developments.

Bitcoin reclaimed the $30,000 price range thanks to the rally it achieved in the last two weeks. It exchanged hands at $30,156 at the time of writing. Whale activity strongly supported the rally. Furthermore, addresses holding over 1,000 BTC have been buying during the same two-week period.

Source: Glassnode

Read about Bitcoin’s price prediction for 2023/2024

Although the market currently looks bullish, Bitcoin traders should still proceed cautiously. This is because the market might still pull off another bearish wave, especially if recent ETF filings get shot down.