Bitcoin Soars to $34,000: Institutional Buying Surge and Supply Shortage Drive Bull Run

Recently, the price of Bitcoin has experienced a remarkable surge. In just half a month, it skyrocketed from over $20,000 to $34,000, with market sentiment exceptionally high. This surge has propelled Bitcoin's total market capitalization to the ninth position in the world, just behind Alibaba.

However, in the past 24 hours, the price of Bitcoin has experienced a pullback. This adjustment has also affected other mainstream cryptocurrencies, with 38 out of the TOP 50 seeing declines, among which a certain token had the largest drop, reaching 11.34%. Nevertheless, the overall market speculation enthusiasm remains high.

Behind this round of skyrocketing market, the active entry of institutional investors has played a key role. Data shows that in the past 30 days, approximately 87,954 Bitcoins have been withdrawn from major trading platforms. Among them, a well-known exchange set a historical high for daily outflow, with over 3,500 Bitcoins being transferred out. The direction of these funds is widely believed to be institutional investors' purchases.

Currently, the total amount of Bitcoin held by 9 funds exceeds 23 billion dollars. Large-scale accumulation of Bitcoin has become one of the main strategies for major institutional investors. An on-chain data analysis expert pointed out that as institutional investors continue to pour in, the liquidity of digital currency exchanges is gradually decreasing.

After a large amount of Bitcoin was withdrawn from exchanges, most of it was transferred to custody wallet addresses. At the same time, the amount of Bitcoin held by miners continues to grow. This trend of decreasing supply is bound to drive up the price of Bitcoin. However, it is worth noting that the decrease in market supply also means reduced liquidity, which may lead to potential severe volatility risks in the future.

Despite recent regulatory challenges faced by the cryptocurrency industry, positive news continues to emerge. The U.S. Office of the Comptroller of the Currency recently stated that it allows federal banks to use stablecoins for payments and other activities. This decision is seen as strengthening Bitcoin's position as "digital gold" and is referred to in the industry as a "significant victory for the crypto industry and stablecoins."

International mainstream media have also begun to closely monitor Bitcoin's performance. A well-known financial media outlet reported on its front page on Monday, US time, that Bitcoin has surpassed 30,000 dollars.

The market's perception of Bitcoin is also changing. A senior executive from a major investment bank who once compared Bitcoin to "worse than the tulip bubble" is now seeing the bank's market strategy expert predict that Bitcoin's long-term price target may exceed $146,000, believing that Bitcoin may capture a portion of the gold market share in the future.

It is worth mentioning that on January 1st, the Bitcoin to gold exchange rate reached a historic high, surpassing the peak of the winter bull run in 2017.

Whether Bitcoin will reach the consensus range of $50,000 to $100,000 as predicted by some strategists is something we still need to wait and see. However, it is certain that the current market environment, institutional participation, and supply-demand relationship are providing strong momentum for Bitcoin's continued rise.