- Bitcoin surged nearly 9.4% on Friday, nearing $78,000 amid strong weekly gains
- Institutional buying and regulatory clarity are key drivers of the recent Bitcoin rally
- Bitcoin ETFs saw improved inflows after months of negative trends, boosting market confidence
Sathvik Vishwanath, cofounder and CEO of Unocoin, told NDTV Profit said it was too early to determine whether the recent Bitcoin rally indicated the beginning of a sustained bull run.
Bitcoin surged as much as 9.4% on Friday, trading around $78,000, putting the cryptocurrency on track for its strongest weekly gain in more than three years.
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The original cryptocurrency has gained around 24% this week, which would mark its biggest weekly advance since March 2023 if sustained.
The rally has also lifted crypto-linked stocks, with Strategy rising 29%, Coinbase gaining 25% and Robinhood advancing 13%.
"Seeing 25% increase in last two-three days, would definitely not call it a long-term rally," Vishwanath said. "Definitely not a very small bounceback. We will have to wait and watch for the next couple of weeks."
He attributed the move to several factors, with institutional buying emerging as one of the biggest drivers. Increased liquidity and short covering have also contributed to the rally, he said.
The Trump administration's push for the crypto-focused Clarity Act has provided an additional regulatory positive for the sector.
Vishwanath said Bitcoin's potential role as a treasury asset has existed for some time, but the infrastructure around the cryptocurrency is changing in a way that is reducing the friction for institutions seeking to explore it.
This has also helped improve flows into Bitcoin exchange-traded funds, which had been largely negative over the previous two to three months, he said.
Bitcoin is increasingly being viewed both as a way to gain exposure to the cryptocurrency through ETFs and as a potential treasury asset. However, institutional allocations remain significantly smaller than those for traditional assets such as gold and US Treasury bonds.
According to Vishwanath, regulation is important less because it changes how Bitcoin itself operates and more because it can provide the confidence institutions need to enter the ecosystem.
"The biggest hesitation" for institutions has been regulatory uncertainty, he said. Even where fund managers want to allocate a portion of their portfolios to Bitcoin, they can face resistance from partners and shareholders.
Greater regulatory clarity could help remove some of that resistance and encourage more institutional participation.
At the same time, Bitcoin remains exposed to broader market conditions. Vishwanath said US Treasury yields could influence ETF flows and the broader cryptocurrency market. Higher yields could make Bitcoin less attractive and potentially result in ETF outflows.
Profit-taking is another risk following the sharp rise.
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"If there was a 25% increase in last two days, they could start doing profit booking," Vishwanath said. "If that happens, present trend may not continue."
Looking ahead, Vishwanath said historical Bitcoin cycles also warrant caution. Based on the timelines of previous cycles, he does not expect 2026 to necessarily be a particularly bullish year.
Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
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