Bitcoin has had a strong 2021, surpassing $30,000 and achieving over 80% in gains YTD. Yet, data suggests that it may still have more potential for growth.
The cryptocurrency has even outperformed major asset classes, rebounding impressively from the market downturn a year ago.
Bitcoin Outflows to Personal Wallets
Bank of America strategists Alkesh Shah and Andrew Moss noted that $368 million of BTC was sent to personal wallets during April 4th’s week, with the period seeing the second-largest outflow of bitcoin from crypto exchanges in 2023.
The duo suggested that the trend of moving tokens from crypto exchanges to personal wallets could indicate investors are intending to hold onto them, reducing sell pressure.
“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.”
BofA strategists added that there may have been concern regarding the U.S. regulatory crackdown on exchanges, with Coinbase and Binance particularly facing scrutiny from regulators.
The recent surge has reignited discussions regarding Bitcoin’s potential as a store of value. Analysts have previously highlighted the cryptocurrency’s resilience, particularly during the two previous “winters” before the 2022 downturn. In both cases, there were significant returns after the markets rebounded.
Most recently, Bernstein analysts have stated that favoring gold over Bitcoin is irrational, drawing a comparison with “hating on a faster horse.”
Bitcoin an “Escape Route”
Robert F. Kennedy Jr believes that Bitcoin provides a potential “escape route” for individuals during the financial sector’s turmoil. The nephew of former President John F. Kennedy recently filed documents to run for Democratic presidential candidate in 2024 and identified himself as a Bitcoin supporter.
Kennedy also accused President Joe Biden of “weaponizing” regulatory agencies such as the DOJ and FDIC at the end of last year to force banks to stop providing services to crypto entities.
