Cameron Winklevoss, the billionaire founder of the Gemini cryptocurrency exchange, believes that the upcoming Bitcoin (BTC) bull run will be very different. Compared to previous bull markets, Winklevoss noted that there is substantially more capital, infrastructure, and better projects.
Winklevoss said:
Bitcoin’s next bullfight will be dramatically different. Today, there is exponentially more capital, human capital, infrastructure, and high-quality projects than in 2017. Not to mention the very real spectrum of inflation that all fiduciary regimes face in the future. Seat belt!”
Various data points suggest a significant increase in the amount of capital held by investors in the cryptocurrency market. Major cryptocurrency exchanges have also received more regulatory clarity, improving the market infrastructure.
Capital flows to the Bitcoin market
Two metrics mainly show that more money could be involved in the latest Bitcoin rally. First, Tether’s market capitalization (USDT) has exceeded $ 10 billion. Second, Grayscale Investments’ assets under management (AUM) recently hit a new high.
Tether’s market capitalization (USDT) reaches $ 10 billion. Source: CoinMarketCap
To date, Tether is the largest stablecoin in the cryptocurrency market. Investors, especially in countries with regulatory uncertainty, rely on the stable currency to exchange crypto assets. A rapid increase in Tether’s market capitalization could indicate that there is more money waiting to roll out in crypto exchanges.
Grayscale’s crypto asset trusts are arguably the most commonly used investment vehicles by institutions to gain exposure to cryptocurrencies. In the last quarter, assets under management in the Grayscale suite of products reached a record high of $ 5.1 billion.
The AUM grayscale reached $ 5.1 billion. Source: grayscale
Grayscale CEO Barry Silbert said:
“In 2013, everyone thought we were crazy about launching a Bitcoin investment fund. Well look at us now …
The confluence of Tether’s market cap and managed Grayscale’s expanding assets show that the capital held by institutions and retailers continues to increase substantially.
The crypto market infrastructure is improving
In 2020, exchanges and banks in the US primarily saw regulatory clarity regarding cryptocurrencies.
The U.S. Office of the Comptroller of the Currency (OCC) allows banks to provide and operate crypto custody solutions. It is essentially a green light for financial institutions in the US to get involved in the cryptocurrency market.
JPMorgan is also reported to have accepted Gemini and Coinbase, two of the largest spot exchanges in the US, as clients. Through this, fear of strained banking relationships affecting exchanges and users has decreased.
Clarity around cryptocurrencies by major US regulators and banks could improve mainstream perception of the asset class. This means that if Bitcoin approaches a new bull market, the improved sentiment across the industry could benefit BTC adoption and its value.
New crypto companies are finding relevant use cases
Overall, projects and companies in the Bitcoin and crypto markets are seemingly increasing in quality. This is due in part to greater regulatory clarity and the fact that more traditional companies are willing to collaborate with crypto companies.
As an example, Bitcoin startup Lightning Zap is working with Visa and has participated in its Fintech Fast Track Program. This allows Zap to launch Visa cards as part of the association.
Zap CEO Jack Mallers said:
“We are contractually obligated to launch one in the next 12 months and plan to launch one in the coming months.”
Better projects, capital increase and infrastructure improvement are resulting in increased confidence levels among Bitcoin investors and this is increasing sentiment across the sector. In the medium term, high-profile investors expect BTC to reflect these factors.
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