Bitcoin has once again reached a historic high after three years.
As of December 1, the price of Bitcoin hovered around $19,561 per coin, peaking at $19,831.2 during the day—the highest since December 17, 2017.
According to William, Chief Researcher at OKEx Research, the sustained rally and record-breaking surge in Bitcoin are primarily driven by the influx of Wall Street investment institutions, which has boosted bullish sentiment.
Wall Street Institutions Enter the Fray
Since October, major institutional investors such as Grayscale Bitcoin Trust (GBTC), asset management firm Grayscale, and hedge fund Galaxy Digital have significantly increased their Bitcoin holdings, pushing prices upward.
Last Friday, Guggenheim Partners filed a document with the SEC, announcing plans to allocate 10% of its net assets (approximately $500 million) to Grayscale’s Bitcoin Trust.
"This signals that Bitcoin’s pricing power is shifting toward Wall Street institutions," remarked a hedge fund manager involved in Bitcoin investments. Some estimates suggest that Wall Street now controls about 50% of Bitcoin’s circulating supply.
However, as institutional investors pour in, many retail investors are cashing out.
A representative from a cryptocurrency exchange noted that over the past two weeks, few retail investors have chased Bitcoin’s rally. Instead, many have taken profits, fearing an imminent correction due to overextended gains.
Key Factors Behind Bitcoin’s Surge
- Inflation Hedge Demand – With central banks maintaining loose monetary policies, inflation fears and low bond yields are pushing institutions toward Bitcoin.
- Declining Gold Prices – The drop in gold prices has accelerated institutional interest in Bitcoin as an alternative store of value.
- Speculative Trading – Some hedge funds hold Bitcoin put options, betting on volatility while influencing prices for short-term gains.
Risks and Regulatory Pressures
Despite Bitcoin’s surge, regulatory scrutiny is tightening.
- The U.S. Treasury plans stricter tracking of crypto wallet owners to combat money laundering.
- Switzerland and the Netherlands already enforce VASP rules requiring disclosures for non-custodial wallets.
On November 26, news of potential U.S. regulations triggered a 13% intraday drop, wiping out ~$3,000 per Bitcoin.
👉 Why Institutional Adoption Could Drive Bitcoin to $100K
FAQs
Q: Why are institutions buying Bitcoin?
A: Institutions seek hedge against inflation, portfolio diversification, and exposure to a high-growth asset class.
Q: Is Bitcoin a safe long-term investment?
A: High volatility and regulatory risks make it speculative. Diversification is key.
Q: How does regulation impact Bitcoin?
A: Stricter KYC/AML rules may reduce anonymity but could legitimize Bitcoin for mainstream adoption.
👉 The Future of Crypto: Institutional vs. Retail Investors
Conclusion
While Wall Street’s growing influence reshapes Bitcoin’s market dynamics, retail investors remain cautious. Regulatory developments will play a decisive role in Bitcoin’s next major move.