As Bitcoin price rises, institutions get down with digital assets

With Bitcoin price sentiment continuing to remain bullish following the uncertainty brought on by the United States presidential election, institutional investors seem to be getting more interested in betting on the markets.

In the seven-day period ending on Oct. 27, Grayscale Bitcoin Trust, run by Grayscale Investments, saw a record inflow of $215 million, which surpassed all of its weekly inflows seen since inception.

At the current rate, it is estimated that Grayscale is on track to hold 500,000 BTC by the end of 2020, which is 2.7% of the circulating supply of Bitcoin.

The increase in institutional investing in Bitcoin is seen in the Chicago Mercantile Exchange as well.

According to CME, LOIH are entities that hold more than 25 CME Bitcoin futures contracts, with each contract containing 5 Bitcoin.

"Bitcoin is already up over 115% YTD compared to gold at less than 30% and the S&P at around 8%. Bitcoin is offering investors a real chance to make gains on their money rather than risk-off assets like cash that are bringing back negative yield. This is something that simply cannot be ignored."

Bitcoin bull run might be driven by institutional investors.

Because institutional investors tend to trade in larger U.S. dollar notionals and in big blocks, it's presumably them that have caused the rise in the price of the underlying asset, Bitcoin.

In addition to supporting the liquidity and price stability of Bitcoin, there are various ways in which an exchange can optimize its offerings to better suit traditional and institutional investors.

Because many of these investors have never taken interest in Bitcoin as an asset class in their portfolio before, it seems essential that the crypto market move in the direction of providing products that institutional players may be familiar with.