Bitcoin breaks through 34000 USD, institutions get on board to drive prices continuously pump

The price of Bitcoin has soared from over $20,000 to $34,000 in just half a month, with market sentiment running high. This rise has propelled Bitcoin's total market value to ninth place globally, second only to Alibaba.

Recently, the price of Bitcoin has experienced a brief correction. In the past 24 hours, the mainstream cryptocurrency market has shown fluctuations, with 38 of the top 50 digital assets declining, among which SUSHI had the largest drop at 11.34%. However, the overall speculative enthusiasm in the market has not significantly weakened.

The recent rise in Bitcoin prices is mainly driven by two factors: large-scale entry of institutional investors and a decrease in market supply. Data shows that in the past 30 days, approximately 87,954 Bitcoins have been withdrawn from exchanges, most of which came from major trading platforms. On January 3rd, a trading platform set a record high for daily capital outflow, with over 3,500 Bitcoins leaving, which are likely to have been purchased by institutional investors.

Currently, the total amount of Bitcoin held by 9 funds exceeds 23 billion dollars. Accumulating Bitcoin has become the main investment strategy for several large institutions. On-chain data analysis experts point out that as institutional investors continue to enter the market, the liquidity of cryptocurrency exchanges is decreasing.

After a large amount of Bitcoin was withdrawn from exchanges, it was mostly transferred to custody wallet addresses. At the same time, the number of Bitcoins held by miners is also steadily increasing. This trend of decreasing market supply will drive the price of Bitcoin to rise, but it may also lead to liquidity issues in the future, potentially increasing market volatility risks.

Despite the recent regulatory challenges faced by the cryptocurrency industry, the overall regulatory environment is still developing positively. The U.S. Office of the Comptroller of the Currency recently publicly stated that it allows federal banks to use stablecoins for payment and other activities. This decision is seen as a significant victory for the crypto industry and stablecoins, further solidifying Bitcoin's position as "digital gold."

The Financial Times reported on its front page on Monday, U.S. time, that Bitcoin has surpassed 30,000 USD. Market attitudes are also undergoing significant changes, with some large financial institutions that once held a strong skepticism towards Bitcoin now having strategists predicting that the long-term price target for Bitcoin may exceed 146,000 USD and could capture a portion of the market share of gold.

It is worth noting that on January 1st, the Bitcoin to gold exchange rate reached a historical high, exceeding the peak during the 2017 bull market. The market generally expects Bitcoin prices to reach the range of 50000-100000 USD, whether this prediction can be realized, let us wait and see.