Bitcoin "whales", or large investors with sufficient capital reserves, seem to be buying again, as fears that inflation will get out of control strengthen the arguments in favor of investing in savings assets.
The market report of the analytical company Chainalysis, published on Tuesday, says that large investors holding at least 1,000 BTC bought up 142,000 coins last week, resulting in a cumulative amount of almost 200,000 BTC. This is the highest figure in 2021.
The continuation of purchases amid rising inflation expectations around the world suggests that investing in bitcoins is the main option.
According to the Federal Reserve Bank of St. Louis, the 10-year US break-even rate, which shows how the market anticipates long-term price pressures, recently rose to a ten-year high of 2.64%. Bitcoin rose by almost 40% in October, reaching a record high of $66,975.
JPMorgan analysts explained this rally by the fact that Bitcoin, on the contrary, is a means of protection against inflation. This perception is associated with a decrease in the reward for mining bitcoins. This programmed code reduces the rate of supply expansion by 50% every four years, which puts the monetary policy of the cryptocurrency at odds with decades of money printing by the Federal Reserve System.
However, blockchain analysis company Chainalysis, said that Bitcoin needs to expand its presence in cryptography subsectors such as Web3 and decentralized finance in order to remain relevant for a long time compared to Ethereum. Moreover, if bitcoins are possibly used as capital in Web 3.0, then it will have a future as a useful asset in the more innovative side of cryptography.