Analyst says retail investors entering Bitcoin market will push prices to $20k

Analysts have argued that much of Bitcoin's recent upward price action is a byproduct of institutional players entering the fray.

Open interest in the CME's Bitcoin futures market, along with on-chain trends, suggests that a number of large players are the ones accumulating the coins, driving prices higher.

An analyst says that once retail investors begin to enter the crypto market en-masse, BTC will likely pass $20,000, triggering price discovery.

Who's causing Bitcoin's price to spike higher?

In August and September, business services company MicroStrategy purchased $425 million worth of BTC for long-term holding, citing the cryptocurrency's ability to hedge macroeconomic risks.

This was followed by news that Square, the $80 billion fintech giant, had acquired $50 million worth of Bitcoin for a similar purpose to MicroStrategy.

On top of all that, a $10 billion asset manager announced that it had purchased 10,000 Bitcoin while Grayscale Investments, Digital Currency Group's digital asset manager arm, revealed it absorbed $1 billion worth of cryptocurrency over quarter three.

There are also on-chain trends such as miners' reserve balances and miners' coins sent to exchanges decreasing in tandem that suggest there are forces accumulating Bitcoin over the counter.

"The retail segment is not overheated whatsoever currently. It will be soon though Price is leading public interest. This is a telltale sign of smart money entering while retail has their heads buried in the sand. Once the latter catches up to the former, we'll be in price discovery over $20,000."

According to JPMorgan, which released a crypto market report last Friday, the news that PayPal is supporting Bitcoin, Ethereum, and other digital assets is a good place to start.