Amid today's frenzy in the digital currency market, Changpeng Zhao's remarks, "I don't think institutional investors are the driving force behind the rise of Bitcoin," have attracted widespread attention. Is this view tenable? This article will delve into the role of institutional investors in the rise of Bitcoin and reveal the truth behind it.

From a historical perspective, the rise of Bitcoin did not happen overnight. Since the birth of Bitcoin in 2009, it has experienced countless fluctuations and challenges, but it has flourished in recent years. Who is driving it? Some people think it is institutional investors, but Zhao Changpeng holds a different view.

 Involvement of institutional investors

Institutional investors refer to professional investors with institutions as the main body and possessing huge funds and resources. Their intervention usually creates huge ripples in the market, and the Bitcoin market is no exception. In recent years, an increasing number of institutional investors have become involved in the digital currency market, raising questions about whether they are the driving force behind Bitcoin's rise.

In fact, the involvement of institutional investors has indeed brought huge capital inflows and increased attention to the Bitcoin market. The sharp rise and fall of Bitcoin prices are often closely related to the trading behavior of institutional investors. However, Changpeng Zhao believes that this is only a superficial phenomenon, and institutional investors are not the decisive factor in the rise of Bitcoin.

 The driving force behind Bitcoin

To discover the real driving force behind Bitcoin’s rise, we need to dig deeper into its nature. As a decentralized digital currency, Bitcoin's core concept is blockchain technology. The decentralization, security and anonymity of blockchain provide a solid foundation for the development of Bitcoin.

In addition to this, Bitcoin is also driven by global distrust of the traditional financial system and concerns about inflation. In some countries, the depreciation of government currencies and the instability of the financial system have led people to seek a safer and more stable way to store value. Bitcoin emerged as a safe haven asset.

 The influence of social factors

In addition to technical and economic factors, social factors are also driving the rise of Bitcoin. The rise of social media has allowed information to spread more quickly, and the popularity of Bitcoin has also spread rapidly. Many well-known figures and institutions express their opinions through social media platforms and have an impact on the Bitcoin market.

In addition, the popularity of Bitcoin also benefits from the arrival of the digital age. The development of emerging fields such as mobile payment and virtual asset trading has provided convenient conditions for the promotion of Bitcoin. People's awareness of digital currencies continues to increase, which has also contributed to the rise of Bitcoin.

 Conclusion

To sum up, the rise of Bitcoin is the result of a combination of factors. Although the involvement of institutional investors has an impact on the market, it is not a decisive factor. Technical, economic, social and other factors jointly promote the development of Bitcoin. Changpeng Zhao’s views may remind us that when discussing the driving force behind the rise of Bitcoin, we should not be limited to superficial phenomena, but should dig deeper into its essence and the complex factors behind it. The future of Bitcoin is full of challenges and opportunities. Let us wait and see and witness the future development of the digital currency market.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Chief Executive Officer Changpeng Zhao, a leading figure in the crypto community, has poured cold water on the idea that institutional investors are driving Bitcoin price movements. While some data suggests traditional investors are finally entering the cryptocurrency space, Changpeng Zhao recently reiterated that the latest price action was led by retail investors, suggesting that large financial institutions have yet to join the market.

part of trinity

Institutional investors are large entities that invest on behalf of funds and high-net-worth individuals. They have long been considered part of the holy trinity of successful cryptocurrency adoption, along with widespread retail adoption and government approval, and while progress on the other two factors appears to be mixed, institutional investor interest appears to be on the rise in 2019 There has been some recovery.

Grayscale’s digital asset investment report released a few months ago showed a significant increase in inflows into its crypto investment products in the first quarter of this year. It is worth noting that according to Crypto
Briefing reports that hedge funds invested just $1 million in the fourth quarter of 2018. In the first quarter of 2019, this number rose to $24 million.

The investment firm's second-quarter results showed continued interest from institutional investors. Cash inflow has doubled since the first quarter to $84.8 million. 24% of the money flowed into the company's non-Bitcoin funds, up from almost zero in the first quarter, and institutional demand accounted for 84% of capital inflows, up from 73% in the first quarter.

CME Group’s Bitcoin futures product trading volume reached an all-time high in May this year, 27% higher than the all-time high recorded last month.

Rising institutional investor interest in Bitcoin coincides with a resurgence of Bitcoin bull momentum, leading many to conclude that Wall Street is joining the crypto party, but Binance leaders disagree.

Individual investors still “rule”

CZ recently told Bloomberg:

"We're not seeing institutions growing faster and we're seeing an uptick in both places today. There hasn't been a huge increase in the number of institutions entering the industry in 2019."

Although institutional activity on the exchange is increasing and growing, it does not exceed the growth of retail trading. CZ told Bloomberg that individual investors account for about 60% of Binance’s trading volume, a figure that is the same as a year ago.

So while asset managers like Grayscale Investments appear to have piqued the interest of institutional investors, that enthusiasm has yet to spread to the more volatile and less regulated parts of the industry in which exchanges operate. While some institutional traders will use arbitrage strategies between exchanges, the largest trades are conducted in the over-the-counter market, which allows large clients to purchase cryptocurrencies without affecting the rest of the spot market.

However, despite CZ’s assertions, it is clear that fund managers are paying attention to cryptocurrencies as the concept of digital gold becomes more widely accepted.