Bitcoin prices climbed past $92,000 today as institutional news fueled gains.
getty
Bitcoin prices rallied on Tuesday, December 2, climbing above $92,000 as investors responded to the news that major asset manager Vanguard will allow investors to trade crypto exchange-traded funds and mutual funds.
The world’s most prominent digital currency rose to more than $92,342.00, up roughly 9% from the level of $83,800 that it reached the day before, according to Coinbase data from TradingView.
“We just got word that Vanguard—the anti-crypto fortress—is finally opening its gates to Spot Bitcoin ETFs,” William Stern, founder of Cardiff, stated via email.
“When the second-largest asset manager in the world flips from ‘critic’ to ‘distributor,’ it signals to every wealth advisor in America that the coast is clear,” he added.
“The market is aggressively front-running the wall of capital that is about to flow through that door.”
Brian Huang, cofounder of fintech firm Glider, also spoke to this matter.
“A huge announcement overnight is that Vanguard will now allow crypto ETFs on its platform,” he said through emailed commentary. “They have been one of the major opponents of crypto in the past, they are evolving from their old school mentality of investing.”
“They want to protect their clients, but it’s become clear now that the demand for investing in digital assets outweighs their perceived risks,” said Huang.
Bank Of America Announcement
The analyst also highlighted the latest developments related to Bank of America, which has recently signalled its openness to clients incorporating cryptocurrencies into their portfolios.
“For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate,” Chris Hyzy, chief investment officer for Merrill and Bank of America Private Bank, said via a statement, according to Yahoo Finance.
Huang described this as “another juggernaut announcement,” stressing that “Despite the price action, institutional adoption is not slowing down.”
He emphasized that bitcoin may be headed for additional losses in the short-term, stating that “Near-term pain may not be over as VCs like Placeholder founder Chris Burniske have suggested BTC only gets interesting below $75k.”
However, he added that “Longer term, everyone seems to agree BTC will inevitably reach $150k–it’s just a matter of when.”
Chris Robins, head of growth and strategic partnerships at Axelar, also spoke to the major institutional developments that have made headlines lately.
“Bitcoin and altcoins rallied today because of the major news that Vanguard approved crypto ETFs, this news coupled with major players like Cantor Fitzgerald reporting over a million dollars held in a Solana ETF and Bank of America telling wealth clients to allocate 4% of their portfolios to crypto is driving speculation,” he communicated via email.
Short Squeeze
Some analysts highlighted the impact that leveraged positions had on the rise in bitcoin prices, stating that the rally triggered a short squeeze.
Pei Chen, executive director and COO at Theoriq, spoke to this development, stating that “we observed a massive short squeeze going on: as the price edged up, highly leveraged traders betting on a drop were forced to automatically buy to cover their positions, creating an explosive, self-reinforcing loop of purchasing pressure.”
“The positive price impact was amplified by a typically lower volume going into the holiday weeks,” she added.
Julio Moreno, head of research for CryptoQuant, agreed that a short squeeze helped fuel today’s climb in bitcoin prices, stating via Telegram that “In the futures market there was some short covering activity.”