Bank of America: BTC Rally Supported By Hoarding After Surge

  • The Outflow of Bitcoin from crypto exchanges and inflow to personal wallets was recorded, indicating potential holding intentions.
  • Concerns from US regulatory actions may have triggered the exodus from exchanges, while Bitcoin’s surge surpasses major asset classes.

Bank of America Corp strategists suggest that if we consider the flows between cryptocurrency exchanges and personal digital wallets, Bitcoin’s impressive rally in 2023 could potentially continue, reported Bloomberg.

According to a note written by strategists Alkesh Shah and Andrew Moss, there was a net outflow of the second-largest amount of Bitcoin from crypto exchanges this year during the week ending on April 4. Additionally, during the same period, a total of $368 million worth of Bitcoin was sent to personal wallets.

The strategists further added:

Investors transfer tokens from exchange wallets to their personal wallets when they intend to hold them (or HODL), indicating a potential decrease in sell pressure.

Moreover, the Bank of America strategists stated in a note published on Monday that the recent exodus from crypto exchanges could be attributed to concerns arising from the regulatory crackdown on digital-asset platforms in the US. Bitcoin’s surge so far this year has surpassed that of major asset classes, triggering a contentious debate about the reasons behind the token’s recovery from the 2022 slump.

Meanwhile, Bitcoin has surged above $30,000 this week, marking the first time it has done so since June 2022. The cryptocurrency’s value has increased by over 80% since December 31st, outperforming the Nasdaq 100 tech index, which saw a gain of 19%. Gold, on the other hand, has only risen by around 9%.

Despite the downfall of FTX and other crypto firms and aggressive actions by US regulators, digital tokens have experienced a surge in value in 2023. However, this rally has occurred in a market that has seen a decrease in liquidity and trading volumes following the bankruptcies of these companies.

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