Pablo Soria de Lachica on Bitcoin’s Price Response to the Growing Involvement of Large and Institutional Investors

For over a decade now, Bitcoin has fascinated both regular people and investors pursuing the next big thing on the market. Yet, despite commanding headlines, the original cryptocurrency and all the digital coins inspired by it have remained in somewhat of a gray zone, barely scratching the surface of their perceived potential. “While individual investors have helped sustain interest in Bitcoin, the cryptocurrency market has slim chances of becoming a staple of investment portfolios without the support of institutional investors,” comments leading forex broker Pablo Soria de Lachica.“For most of the past decade, most of these investors have been sitting on the sidelines, reluctant to put money into an extremely volatile and barely regulated market. However, they appear to have started changing their position and getting more involved with Bitcoin, which is having a positive impact on the value of the cryptocurrency.”

In a paradoxical development, acceptance of digital assets is growing along side increased action from regulators. Pablo Soria de Lachica says, “Bitcoin began as a rebellion against the traditional system, its self-proclaimed mission being to decentralize and democratize finance. While many dismiss the cryptocurrency as a fad and a speculative asset, there is also a rising number of market players who see it as a viable alternative to traditional money and pin great hopes on the underlying technology, blockchain. Regulation may be perceived as the enemy of cryptocurrencies, but it is the very thing that instills confidence in the market and can, therefore, spur into action all the investors currently sitting on the fence.”

The stock market plunge caused by the pandemic led to a surge in Bitcoin buying, pushing the price of the cryptocurrency beyond $63,000 in April 2021 to mark a new record high. However, much of the gains were lost quickly, and it took an announcement from Teslato give Bitcoin’s value a fresh boost. The US-based electric cars maker disclosed in February a $1.5 billion investment in the cryptocurrency, which played a substantial role in the subsequent price boom. It was also Tesla that triggered a significant value decline in May, when the company said it would stop accepting payments in Bitcoin. Then Elon Musk, the co-founder and CEO of Tesla, provided another solid boost to the price after his company reconsidered and reintroduced Bitcoin payments.

“The Tesla example illustrates that whether proponents of the Bitcoin idea like it or not, the cryptocurrency is as affected by the actions of institutional players as any other asset class,” Pablo Soria de Lachica notes. “Whenever the market learns of an investment or another supportive move by a large company, especially a prominent financial services group, the price of Bitcoin starts going up and vice versa. The most noteworthy recent developments are the stock market listing of Coinbase, the largest US cryptocurrency exchange, and the new tax provisions included in the $1 trillion infrastructure plan of the current US administration. Targeting digital assets, the proposed legislation is expected to raise $28 billion over the next decade to support various infrastructure investments.”

The Coinbase listing in April was viewed as a landmark event for the cryptocurrency market, one that is widely expected to lend greater legitimacy to digital assets and attract a large number of new investors. The tax provisions, on the other hand, initially spooked the market since they significantly increase the burden of reporting on virtually all parties involved in the transfer of digital assets, Pablo Soria de Lachica explains. However, these proposed new requirements seem to be sitting well with institutional investors, who apparently welcome the prospect of far greater regulatory certainty and enforcement. According to an analysis by Glassnode, large-value transactions by institutional investors rose 10% in the first week of August, pushing up the price of Bitcoin over this period by almost 20%.

Pablo Soria de Lachica specialized in international trading after obtaining an MBA from the Universidad Tecnologico de Mexico (UNITEC), going on to become one of the most prominent forex experts in the world. In addition to helping his clients maximize their investment returns, he also develops and publishes a large volume of educational content, sharing his experience and insights through webinars, newsletters, and blog posts. At present, Pablo Soria de Lachica is working in partnership with Kartoshka, a company advancing the latest technological applications in sales, telemarketing, and customer support.

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About the Author

Pablo Soria de Lachica
Pablo Soria de Lachica is an internationally acclaimed broker and Director of Business Development of Bforex, a renowned currency trading firm based in Panama City, with 18 offices spanning the globe, including locations in Brazil, Mexico, and Uruguay.