Bitcoin experienced its second-strongest January in history-- and its best January since 2013-- up nearly 40 per cent on widespread news that institutional investors had returned to the bitcoin market.

Zhong Yang Chen, head of scientific research at CoinGecko, told Cointelegraph, "in January 2023, the main funds of institutions went to data asset funds, especially in the last two weeks, Bitcoin is a huge beneficiary."

In addition, the total assets under management of digital currency investment wealth management products have risen to $28 billion, especially represented by Bitcoin, which is up 43 per cent from its bottom point in the current cycle in November 2022, according to a blog post by CoinShares on January 30. Digital currency investment and wealth management products are a good index to test the degree of institutional participation.

The main reasons for this rise are different, not only because of macro factors such as higher inflation, but also because of more technical reasons such as squeezing bitcoin short sellers. In addition, a scientific report by Matrixport showed that institutional investors "did not abandon data encryption", further suggesting that 85 per cent of bitcoin purchases in January were concluded by US institutional participants. The digital money service provider added that many investors used the US consumer price index released on January 12 "as a confirmation data signal for buying bitcoin and other encrypted assets".

Most of the increases are in the US market period.

But how did Matrixport benefit from US institutional investors in raising the monthly summary of BTC to 85 per cent? As the company's headquarters in Singapore often put it in a recent market briefing: "the most surprising statistic is that the vast majority of Bitcoin's 40% rise so far this year has occurred in the United States." [.] This is also 85% of the bitcoin market. Matrixport again:

"We have always felt that Asia is driven by retail investors, while the US is driven by institutional investors."

So, if the market price of Bitcoin rises in US stock market trading time, but Asian stock trading time falls, as it seems in January, can you assume that US institutional investors are buying?When Asian investor traders are selling bitcoin, is this a kind of human yin-yang interaction? It's obviously like this. Matrixport added that during the US trading session, "institutions, which are actually 'steady hands'," have taken advantage of the stock market slump.

Is this really boosting the price of bitcoin, the main reason for the rise in January? "from my point of view, Asian investors and US institutional investors are the two key drivers of Bitcoin net liquidity," Monad Labs co-founder and CEOKeone Hong, who developed and designed the Monad blockchain, told Cointelegraph. Of course, there are other market participants, but when the operation of the capital is fully considered, the "irregular" influence is the greatest, Han Zhiqiang added:

"in the current market, institutional participants represent a potential new-or a new-source of demand similar to that of early 2021. In addition, in the retail sector, Binance, Bybit, Okex and Huobi and Asian-centric trading centres account for the vast majority of spot market volume and the vast majority of derivatives trading volume.

However, others are not so sure. "because we don't have information about the true identity of traders, we can't confirm that the US market is driven by institutional investors, while Asian markets are driven by retail investors," Jacob Franz, a scientific research investment analyst at CryptoCompare, told Cointelegraph.

In fact, there is a "mindset" or belief that there is a very large interest among investors in Asia, "especially in South Korea, because the won is the fourth largest trading pair after the US dollar, US dollar and US dollar," Franz added. But it can't really be quantified.

Even so, he agreed that the Matrixport report was very interesting, adding: "everyone's statistics show that more than 2/3 of BTC returns in January can be attributed to stock trading hours in the US market, and our historical one-hour data also proves that a lot of time trading volume is above average."

Justin Darnessen, director of institutional marketing at Amber Group, a Malaysian digital currency company, told Cointelegraph: "I really don't have an indicator to measure whether the 85 per cent figure is correct." He focused on feeling that the January rebound was generally macroeconomic-driven, especially when inflation had fallen, and expectations that it would not be easy for the Fed to raise interest rates again at its meeting. He added:

You will see individual stocks, gold, real estate, yes, there is also a login password to make a profit. This is likely to be driven by small institutions and small investors, especially in the case of FOMO intervention.

D'Anethan also discussed Coinbase's recent premium index. "it's dark green, but not very large." This is generally a good evaluation indicator, which can be used to consider whether the larger U. S. physical line is in a huge amount of money recovery. At this stage, it looks soft and proactive, but it may just reallocate the money to sit on the court.

Jacob said that the stronger way to consider the activities of American institutions is to look at "just ask them to provide services trading centers." In contrast, the Chicago Mercantile Exchange Group (CME Group), one of the largest institutional trading centers in the password industry, saw a 59% increase in monthly trading volume in January, while LMAX Digital, another institutional trading center, also increased trading volume by 84.1%, higher than the average increase in other trading centers.

In that case, who can ensure that Asian retail traders do not operate in the US market for a long time? For example, Chan acknowledges that while the market "does focus on more ups and downs within the US term", CoinGecko feels that this "more reflects the fact that US fiscal policy is now too harmful to access the password market and the broader financial market." When traders feel the market ups and downs, they are the most dazzling, in the current environment, Asian traders are likely to be deeply attracted by 'Fed observation' to capture hidden market trends.

Charles Coipper, head of scientific research at Fidelity Digital Assets, told Cointelegraph that there is no single thing or metal catalyst that can explain the recent market price of bitcoin. But for him, "it is not surprising to fully consider the established prerequisites-that is, more and more non-negotiable coins, that is, coins that have not been injected for more than a year-and the occasional discharge of coins from the trading center." Both factors have contributed to a lower supply of bitcoin and set a sound standard for higher prices.

Coipper also mentioned that the stock futures and derivatives markets were a factor in the surge in BTC stock prices. "there have been more forced liquidations of short orders in the past few weeks." Dennison also mentioned that "short sellers are squeezed" is the driving force behind the possibility. "on the whole, this is not the main reason for the rise, but when the situation does go up, it will accelerate."

Look forward to the future

Even so, if people allow Bitcoin to bring some regulatory expectations in January of this year, will people necessarily think that Bitcoin will last until 2023?

"as the market establishes what participants prevent the spread of the dilemma, we are going to see an increase in the number of isolated new entrants in the second half of last year, especially with the birth of innovative lease agreements to ease the important troubles of the recent collapse," Enclave MarketsCEO Peter Boss, a data asset trading platform, told Cointelegraph.

This management shows that more must be done to maintain the trend of the system. "because it really attracts institutional liquidity, logging into the password market will require the creation of more complex commodities that allow moderate hedging and risk management," Mr Booz added. But he is cheerful that dealers will break through themselves.

'inflation seems to have peaked, and many expect Fed meetings and other central banks to slow the pace of tightening interest rates, 'Mr. Coipper said. While this does not necessarily mean a rise in the price of risky assets, he concludes, "if central banks release pressure on fiscal policy as they did in the past, institutions and other financial planners may switch back to bitcoin in a longer period of time."