Breaking: Another multi-billion dollar company buys more than $100 million in Bitcoin

Back in 2019, Stone Ridge applied to become a Bitcoin Fund, filing a registration statement with the SEC for the NYDIG Bitcoin Strategy Fund. The fund manages around $15 billion assets and was seeking to raise up to $25 million. The most recent announcement made by Stone Ridge Holdings Group revealed that NYDIG is now holding around 10,000 Bitcoin, worth around $115 million at today's price. 

Robert Guttman, the CEO of NYDIG asserted:

We've seen a pretty dramatic acceleration in the count of institutional investors who want to participate in the market since March of this year. The macro backdrop against the public health backdrop has caused a lot of people to rethink their portfolio composition.

NYDIG also manages other funds including the Bitcoin Fund LP with around $190 million in assets and Bitcoin Yield Enhancement Fund LP, with $140 million. Guttman also states that NYDIG owns smaller Basket Funds that include BTC, ETH, XRP, LTC, and BCH. 

The interest in Bitcoin is clearly surging as just five days ago, Square, co-founded by Jack Dorsey, the CEO of Twitter, bought $50 million worth of Bitcoin, approximately 4,709 Bitcoins. The company was already known for its investments in Bitcoin after launching a Bitcoin trading App in 2018. 

Governments around the world are clamping down on crypto

Despite the recent spike in institutions buying large sums of Bitcoin, governments around the world are clamping down on cryptocurrencies. Just recently, a new draft bill was proposed by the Government of Spain to force citizens to disclose their cryptocurrency holdings. The Minister of Finance, Maria Jesus Montero has stated that fighting against tax fraud is an 'absolute priority' and that the Government plans to use 'zero-tolerance against any fraudulent practice'. 

Furthermore, global regulators are working on a unified framework on CBDC (Central Bank Digital Currency). Finance ministers and central bank governors from the 20 world's largest economies are working with the International Monetary Fund (IMF), the World Bank, and the Bank for International Settlements (BIS) on the rules and procedures of integrating central bank digital currencies (CBDC) in the existing banking systems, according to the recent report published by G20.

Bitcoin reacts positively to the news

Following the last announcement by Square about the purchase of $50 million worth of Bitcoin, the price of the digital asset had a significant 2.5% spike within the next few hours, paving the way for bulls to push it above $11,000 in the following days. Bitcoin is now trading at $11,428 and it's eying up $12,000.

BTC/USD daily chart

So far it seems that Bitcoin hasn't reacted as the announcement from Stone Ridge happened minutes ago. However, considering how the price reacted last time, it wouldn't be a surprise to see Bitcoin jumping another 2-3% within the next few hours. The flagship cryptocurrency peaked at $11,728 on October 12 but has seen a significant pullback, mostly because of the recent strength from the U.S. Dollar. 

BTC IOMAP Chart

The In/Out of the Money Around Price chart by IntoTheBlock shows there is only one significant area of resistance between $11,451 and $11,779, with 895,000 BTC in volume. Above this point, the next resistance areas are notably lighter well until $13,150, in comparison. A bullish breakout above $11,770 has the potential to take BTC up to $12,000 and even $13,000 considering there isn't a lot of resistance to the upside.

BTC/USD 30-minutes chart

On the other hand, short-term selling pressure is quite strong. On the 30-minutes chart, the price has dropped below the 50-SMA and the 100-SMA and will turn both of them into resistance levels. Additionally, looking at on-chain metrics provided by Santiment, we can observe a decrease in the number of Bitcoin holders. The number of whales with 1,000 - 10,000 coins decreased from 2,094 on October 1 to 2,077 now.

Similarly, holders with at least 10,000 coins and up to 100,000 are going away. The number dropped from 111 on October 2 to 109 now. A bearish breakout below the critical support level at $11,000 could drop Bitcoin down to $10,800, where the 50-SMA is established on the daily chart.

BTC Holders Distribution Chart

Important points to consider

Bitcoin usually reacts positively to news about big companies buying large sums of the coin. The most critical resistance level is established at $11,779 according to the IOMAP chart. A breakout above this point can push the flagship cryptocurrency up to $12,000 and potentially even $13,000.

On the other hand, it seems that Bitcoin holders are leaving and the U.S. dollar is gaining traction, usually a bad indicator for the future price of Bitcoin. If bulls can't defend the critical $11,000 support level, Bitcoin will fall towards the daily 50-SMA at $10,800.