Bitcoin (BTC USD) Cryptocurrency Price Could Rise 1% in Just $93 Million Inflow

March 18, 2021
Bitcoin Kiosk As Currency Climbs Following Renewed Backing

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Bigger investments into Bitcoin may be able to move its price significantly.

The largest cryptocurrency has doubled so far in 2021 as institutions and retail investors pour in cash, not to mention Tesla Inc’s $1.5 billion purchase and all the buying from MicroStrategy Inc. JPMorgan Chase & Co. strategists have estimated that institutional flows into Bitcoin are up 20% in dollar terms this quarter from the prior period, while retail has increased 90%. And that intake may be moving the price of Bitcoin more than it would some other assets, according to strategists at Bank of America Corp. including Francisco Blanch and Savita Subramanian.

Read more: Retail Bitcoin Traders Rival Wall Street Buyers as Mania Builds

“Bitcoin is extremely sensitive to increased dollar demand,” the BofA strategists said in a note Wednesday. “We estimate a net inflow into Bitcoin of just $93 million would result in price appreciation of 1%, while the similar figure for gold would be closer to $2 billion or 20 times higher. In contrast, the same analysis for the 20-year-plus Treasuries shows that multibillion money flows do not have a significant impact on price, pointing to the much larger and stable nature of the U.S. Treasuries markets.”