Bitcoin outflows reached $368m in second week of April

The leading crypto currency exceeded leading asset classes in a spectacular reversal from the market wide rout just a year ago

Bitcoin has shown enormous strength in 2023, soaring beyond $30k, raking in more than 80 per cent in year-to-date gains. However data indicates that there could be room for more growth.

The leading crypto currency exceeded leading asset classes in a spectacular reversal from the market wide rout just a year ago.

Bank of America Corp.’s strategists Alkesh Shah and Andrew Moss noted that a net $368mln of bitcoin was sent to personal wallets in the week through April 4. Interestingly, this time span saw this year’s second-biggest net bitcoin outflow from crypto exchanges.

The strategists, in a note, underlined that the trend of moving tokens from crypto platforms to personal wallets generally means that investors are looking to hold them indicating a fading sell pressure.

Investors transfer tokens from exchange wallets to their personal wallets when they plan to hold them (or HODL), suggesting a probable decline in sell pressure.

The Bank of America experts also said that concerns with respect to the US regulatory clampdown on crypto exchanges may have played a part to the outflow. For example, big names, including Coinbase and Binance, are facing crucial investigation from regulators in the country.

The latest rush has once more triggered discussion about Bitcoin’s capability as a store of value. Experts earlier underlined the crypto-asset’s strength while pointing out that it has weathered two earlier “winters” prior to the downturn last year. The reversal in each case yielded exponential returns.

Lately, Bernstein analysts stated that favouring gold but not bitcoin is illogical, comparing the choice to “hating on a faster horse.”

Robert F. Kennedy Jr, for one, thinks Bitcoin is an asset that could grant people an “escape route” amid the turbulence in the financial sector. The nephew of ex-President John F. Kennedy, who filed documents with the US Federal Election Commission on April 5 to run as a Democratic presidential candidate in 2024, presented himself as a supporter of Bitcoin.

He also accused President Joe Biden for “weaponizing” the regulatory authorities in the country, like the Department of Justice, and the Federal Deposit Insurance Corporation, to force certain banks to stop operations to crypto entities at the end of 2022.