Fed up with Bitcoin? Institutional investors in the observer role


The inflow of capital from institutional investors has been stalling on the crypto market for a few weeks. The “big money” remains in wait and adjusts the right moment.

The crypto market is gradually getting a boost again. In a 24-hour comparison, the total market capitalization climbs 4.7 percent to 1.48 trillion US dollars, and the Bitcoin price is also getting some tailwind. At the time of going to press, the key crypto currency had risen by one percent to $ 35,297. However, the BTC rate asserts itself more clearly in the weekly view. In the past seven days, Bitcoin has caught up by 11.5 percentage points.

The Altcoins can post more significant price gains. With a plus of 6.1 percent, Ethereum steadfastly defends the 2,000 mark, which it regained in yesterday’s trading session. With a weekly plus of almost 14 percent, the ether price is currently quoted at 2,116 US dollars.

Polkadot (DOT) is also doing well with a daily plus of 7.3 percent. Binance Coin (BNB) is catching up 2.8 percent, XRP even managed to gain 3.7 percent. Cardano (ADA), on the other hand, has to be content with a narrow 0.6 percentage points, while Dogecoin (DOGE) turns a bearable 0.7 percent into the red. In view of the 46 percent increase in value in the weekly chart, the minus is hardly significant.

Bitcoin demand from institutional investors

The market entry of institutional investors was a decisive factor for the upward trend in the past few months. The narrative of “big money” discovering and conquering the crypto market has triggered a chain reaction of massive capital inflows. The increased trust of professional investors and hedge funds in the crypto market has rubbed off on small investors as well. But since the crash in May, demand has stalled. The on-chain analysts Glassnode are therefore currently investigating Week On Chain Reporthow the investment behavior of “big money” has reacted to the downtrend in the past few weeks.

A starting point for drawing conclusions about current investment strategies is the demand for the two Bitcoin ETFs listed in Canada. However, the picture is twofold. Because the Purpose Bitcoin ETF “continued to grow in the sum of the managed BTC”. The net inflows have been 3,929 Bitcoin since May 15, a total of around 95 BTC per day.

However, the QBTC ETF has posted significant net outflows in the past two months. The total stock, i.e. the amount of Bitcoin managed, fell by a total of 10,483 BTC to 12,975 BTC and is now well below the Purpose Bitcoin ETF with a total stock of 21,597 BTC. In total, almost 8,000 Bitcoin have been withdrawn from both investment products.

In wait

However, it looks less dramatic with regard to the Bitcoin holdings in Coinbase: “After a sustained period of net outflows since December 2020, the change in the Coinbase balance has flattened significantly”. There is therefore hardly any pressure to sell from institutional investors.

As an exchange hub for a high proportion of institutional investors, the Coinbase balance sheet is relatively meaningful for the current mood in the market. That can best be described as “undecided”. Institutional investors have scaled down their activities and have switched to the role of observer. Or in the words of Glassnode: “Between the observations of the GBTC premium, the net outflows from the combined Purpose and QBTC ETFs and a stagnating Coinbase balance, the institutional demand seems to be somewhat lackluster”.