Bitcoin breaks through 34000 USD, institutional entry and reduced supply drive price increase

Recently, the price of Bitcoin has shown a strong upward trend, rapidly breaking through the $34,000 mark from over $20,000, with market sentiment running high. The total market capitalization of Bitcoin has jumped to ninth place globally, surpassing several well-known companies.

However, in the past 24 hours, the price of Bitcoin has seen a correction, and mainstream cryptocurrencies have also fluctuated accordingly. Among the TOP 50 cryptocurrencies, 38 have experienced a decline, with some tokens dropping as much as 11.34%. Nevertheless, the overall speculative enthusiasm in the market remains high.

There are several key factors behind this round of bullish market.

First, there has been a large-scale entry of institutional investors. Data shows that approximately 88,000 Bitcoins have been withdrawn from exchanges in the past 30 days, with one large exchange setting a new daily outflow record of over 3,500 Bitcoins. Currently, nine funds hold a total of more than 23 billion USD in Bitcoins, and accumulating Bitcoins has become one of the main strategies for institutional investment.

Secondly, the market supply is tightening. A large amount of Bitcoin is being transferred from exchanges to custodial wallets, and the holdings of miners are also continuously increasing. The decrease in supply has driven up prices, but it may also trigger liquidity risks.

In addition, there have been positive news from the regulatory side. The U.S. Office of the Comptroller of the Currency allows federal banks to use stablecoins for payments and other activities, further solidifying Bitcoin's position. Some financial institutions that were once skeptical are beginning to change their views, with analysts predicting a long-term target price for Bitcoin to exceed $146,000.

On January 1st, the Bitcoin to gold exchange rate hit a historic high, surpassing the peak of the 2017 bull market. Some institutions expect the price of Bitcoin to break through $50,000 to $100,000, but the market trends remain to be observed. Overall, institutional involvement and supply contraction are the main driving forces behind this round of increase, and future developments are worth paying attention to.