Coinbase CEO Just Revealed a Big Catalyst for Bitcoin’s Price

By CCN Markets: Bitcoin has been trading sideways of late but it might not be long before the flagship cryptocurrency moves up thanks to Coinbase CEO Brian Armstrong’s latest reveal.

Why Armstrong’s tweet can move bitcoin’s price

Armstrong’s tweet about institutional investing in the cryptocurrency space comes from a position of authority. Coinbase has just announced the acquisition of Xapo’s institutional custody business, and Armstrong claims that Coinbase custody is now the No. 1 custodian of cryptocurrencies for institutional investors.

So if he says that institutional investors are indeed putting in $200 million to $400 million a week into crypto assets, it can be deduced that demand for bitcoin is increasing. That’s because bitcoin is the digital currency of choice for institutional investors, as evident from Grayscale Investments’ Q2 digital asset investment report.

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Seventy six percent Grayscale’s Q2 inflows went into the Grayscale Bitcoin Trust. So if institutional interest in crypto is rising and investors are pouring more money into this space, you can be assured that bitcoin is in strong demand.

This is the reason why the market should now prepare for a bitcoin price rally.

Higher Institutional Inflows

Bitcoin’s newly-found status as a safe-haven asset that has an inverse correlation with the stock market has been crucial to its rally this year. But President Trump’s decision to delay additional tariffs from the beginning of September to mid-December has given the stock market a slight boost of late, causing bitcoin to fall.

Armstrong’s comment gives us insight that bitcoin buying activity is still strong. The fact that institutional investors are betting on the flagship digital asset is proof that they are trying to shield themselves against rising stock market volatility.

The US-China trade war might have hit a temporary ceasefire, but Trump’s unpredictability and weak economic growth in the US mean that the stock market is not out of the woods just yet. This is why we expect the Fed to cut the interest rates once again. Economist Mohamed El-Erian told CNBC:

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Central bankers are being “held hostage” by markets, El-Erian continued. “The market is going to push the Fed to do 50 basis points. Some are saying, ‘Why not even do an emergency cut?’

So as the Fed prints more money to bring down interest rates, the flight of institutional investors toward bitcoin could continue as it is one asset that cannot be manipulated by governments and central banks.

This article is protected by copyright laws and is owned by CCN Markets.

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Author: Harsh Chauhan

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