Bitcoin held its ground above $104,500 on Thursday despite mounting concerns about the US debt levels and continuous warnings from notable figures such as Tesla’s CEO Elon Musk and Coinbase CEO Brian Armstrong.
Bitcoin traded at $104,749 on Thursday, reflecting a modest daily decline.
Armstrong warned that bitcoin could play a much larger role in the global financial system if US electors failed to demand a serious fiscal reform.
Similarly, Elon Musk repeated his sharp criticism at the pressures that government debt would represent to national resources.
He warned that interest payments already eat 25% of total government revenue, and if the deficit continues to stack up, most of the budget will go to paying interest.
Mixed Views on Bitcoin’s Future
Analysts remain divided on the short-term future of bitcoin, with some expecting a drop below $100,000 due to mounting geopolitical tensions and weaker technical indicators.
Such a drop would threaten the increasing number of corporations which have started to stack up bitcoin reserves, data showing 51 listed US companies holding 673,897 bitcoin, representing 3.2% of total offerings.
The Strategy company, previously known as MicroStrategy, has doubled its holdings of bitcoins in just two months, showing the level of exposure that some companies are willing getting into to the crypto market.
New Whales Buy Up Bitcoins
Recent data showed new whales are starting to stack up on bitcoins since last January, with their wallets holding over 1.1 million bitcoins so far, compared to just 100,000 bitcoins a year ago.
This compares to 2.4 million bitcoins on offer in supervised trading platforms.
ETFs
It’s possible that such whales are actually the bitcoin ETFs, which started trading US exchanges last year.
During this period, these funds collected over $44 billion of total net investments, which translates to over 500,000 bitcoins in the past 12 months alone.
The IBIT fund owned by BlackRock alone owns 660,000 bitcoins, while the Fidelity fund owns nearly 200,000 units.
Such aggressive hoardings by major institutions lowered the units on offer in the markets, with the amount falling to less than 2.8 million units by December as prices passed $100,000, before falling even further to 2.4 million units in recent weeks.
