Bitcoin Price at Generational Bottom With Institutions Buying en Masse

Updated by Ryan James
In Brief
  • One crypto analyst says bitcoin may have hit a once-in-a-lifetime bottom because of a unique mix of macro events.
  • He says that the current bottom presents a buying opportunity for investors with a long time horizon.
  • Institutional investment in crypto has flourished in the last two weeks, hitting almost $1 billion.
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Crypto analyst Cred opines that bitcoin may have hit a generational bottom, presenting a good buying opportunity for long-term holders.

On Oct. 5, 2022, Fidelity Investments purchased over $5 million worth of ETH for their institutional investors, not long after the New York Digital Currency Group raised $720 million for a bitcoin fund.

Could institutions be eyeing the long game?

Crypto analyst Cred opines that while it is a toss-up whether bitcoin has reached a so-called generational bottom, a long time horizon will mean you won’t regret buying at $20,000. However, Cred points out that the confluence of macro events like the Covid-19 pandemic, a strong dollar, and increasingly hawkish tightening by the Federal Reserve are influencing bitcoin’s price beyond traditional multi-year price cycles.

“Like how many times will these incredibly unique conditions repeat themselves where we get completely shut down and new economics from COVID, super-inflationary crazy fiscal and monetary policy post-COVID? I mean, that sequence of events is on its own just so unfathomable that, realistically speaking, we may only get one in our lifetime. And therefore, it also presents an opportunity, especially if you can stomach some drawdown.” he declared.

According to Fidelity, investors indeed see an opportunity, albeit within the ambit of their risk appetites.

“We have continued to see client demand for exposure to digital assets beyond bitcoin,” said a Fidelity spokesperson following the announcement.

The $5 million ETH purchase follows a $62 million fundraiser for the company’s Wise Origin Bitcoin Index Fund. But it all started when quantitative digital asset trading firm Cambrian Asset Management bought $20 million worth of Bitcoin and Ethereum for investors on Sep. 22, 2022. These investments, along with NYDIG’s fundraising, mark the first time in two years that institutional investors bought almost $1 billion in crypto in a fortnight.

Do institutional investors have inside information?

The current spate of investments could lead the broader market to believe that institutional investors have additional insights on how to survive a bear market.

While charts mainly remained flat between 2020 and the 2021 bull market and still are relatively stable, investment companies may now be observing interest from institutional players that typically look to crypto as a long-term part of their investment portfolios. These purchases don’t move the price needle much, except in the cases of “whales” purchasing large amounts of crypto, which generally doesn’t include the demographic catered to by investment companies.

But, as in previous bear markets, where others see mostly flat price behavior in the second year of the bear market, the reality could likely be a prolonged rise in price that culminates in a bull market.

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