Bitcoin’s impressive 2023 rally may have some legs left, according to strategists at Bank of America Corp, who believe that cryptocurrency exchange flows and personal digital wallets suggest further gains. The week ending April 4 saw a net $368 million of Bitcoin transferred to personal wallets, marking the second-largest net outflow of Bitcoin from crypto exchanges this year, the strategists wrote in a note.
According to the strategists, when investors transfer tokens from exchange wallets to their personal wallets, it indicates that they intend to hold onto the assets, which may lead to a potential decrease in sell pressure. This suggests that investors believe in the long-term potential of Bitcoin, which has seen year-to-date growth surpassing some major asset alternatives.
While Bitcoin’s growth has been remarkable this year, it’s worth noting that the cryptocurrency experienced a difficult 2022. However, Bitcoin’s resilience to regulatory pressure could be another reason why it’s bouncing back. With regulators scrutinizing the industry, it seems that investors may be holding onto their digital assets, hoping that regulators will eventually become more favorable towards cryptocurrencies.
Bank of America strategists’ note highlights how Bitcoin’s resilience and continued growth in 2023 may be a result of investors’ confidence in the long-term potential of the digital asset. Additionally, the note suggests that regulatory pressure may have been a significant factor in the wider holding of Bitcoin among investors.