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30 November 2020

Analysts: Institutional Investor Interest Fueling BTC Rally, Liquidity Crunch Narrative Debunked | Markets and Prices Bitcoin News

Analysts: Institutional Investor Interest Fueling BTC Rally, Liquidity Crunch Narrative Debunked | Markets and Prices Bitcoin News


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Crypto analysts are pushing back against the narrative that the current BTC rally is being fuelled by a liquidity crunch afflicting bitcoin mining pools in China.

First to present data that debunks the Chinese liquidity crunch narrative is Lucas Nuzzi of Coinmetrics.

In remarks made via a Twitter thread, Nuzzi argues that mining pools not selling their BTC stocks at this point is just “part of a long-term trend.” Indeed, the Coinmetrics data does show that mining pools, a majority of which are mainly domiciled in China, are not selling as their stock levels have remained within the same range over the past 24 months.

With the data apparently discrediting the liquidity crunch narrative, Nuzzi believes instead that “other factors, such as increased institutional participation and macroeconomic concerns, are more likely the culprit.”.

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