Here are the catalysts behind Bitcoin's growth above $23,000

Bitcoin hit a new all-time high at $23,776 (on Coinbase) before retreating to $22,500. The pioneer digital currency gained over 16% on a day-to-day basis, while its market share surpassed 65%.

Bitcoin's market value at $42 billion now exceeds the capitalization of JP Morgan, one of the four largest financial institutions in the US. In comparison, a capitalization of all digital coins in circulation came close to $650 billion.

What are the catalysts behind BTC growth

As FXStreet previously reported, the general fundamental environment was positive for Bitcoin. Institutional investments, low interest-rates, inflation expectations and increased focus on digitalization of the global economy serve as major long-term drivers for Bitcoin. However, some particular catalysts helped BTC break out of the range and stage a breath-taking rally.

More signs of institutional adoption

One River Asset Management has emerged as one of the largest Bitcoin holders. According to Eric Peters, the head of the company, they have already purchased Bitcoins worth $600 million. At the beginning of the year, the company plans to increase its cryptocurrency allocations to $1 billion.

The news served as a signal that another major whale is ready to swim into cryptocurrency waterways. Previously, MicroStrategy announced the decision to finance Bitcoin purchases via raising debt capital. 

Big financial players give in to customer pressure

Northern Trust will begin providing cryptocurrency custodian services. Namely, the above-mentioned  One River Asset Management will hold its Bitcoins in with the Northern Trust. The company with assets worth over $150 billion under management said it had received numerous inquiries from customers interested in cryptocurrency custody services. 

Hedge funds, traditional asset managers, retail organizations, and family organizations are all looking to either invest in cryptocurrency or create crypto products for their clients, Pete Cherecwich, president of asset servicing at Northern Trust, said.

This is just another evidence of how cryptocurrencies are being merged with the traditional financial industry. Earlier, Fidelity Digital Assets announced that it would allow customers to use Bitcoins as collateral for their cash loans.

Financial giants continue pouring money into cryptocurrency startups

A venture arm of a US-based credit card provider American Express invested in the cryptocurrency trading platform FalconX together with Accel, Coinbase Ventures and a fund affiliated with Fidelity Investments are among other investors. The startup raised $17 million in May. The amount of the deal with American Express is not disclosed.

AmEx is not a newcomer to the cryptocurrency market. In 2019, the company launched a blockchain-based app that simplified the process of reconciling invoices and timesheets. Also, AmEx invested in Abra, the app for trading digital assets.

According to Harshul Sanghi, global head of Amex Ventures, the company invests in fintech startups to get a better understanding of the evolving payments ecosystem.

Reputable institutions come up with incredible price forecasts

Guggenheim's chief investment officer Scott Minerd pined Bitcoin's fair value at $400,000. Speaking in the interview with Bloomberg TV, he explained that the forecast is based on Bitcoin's limited supply and its current cost in relation to gold. He believes that Bitcoin and gold have a lot in common; however, the digital version is grossly undervalued at this stage.  

Guggenheim Partners has over $27 billion in assets under management. In November, the company announced the investments in Grayscale Bitcoin Trust.