A recent downtrend in the Bitcoin markets turned into a long-term profitable opportunity for institutional investors.
Data fetched by Alistair Milne, the CIO of Altana Digital Currency Fund, showed record investments worth $1.31 billion entering the Bitcoin and market last week. The money poured in as the flagship cryptocurrency underwent a 30 percent correction from its record high near $42,000.
A majority of capital flew into Grayscale Investments, a New York-based cryptocurrency trust, that purchased almost $1 billion worth of BTC. Meanwhile, CoinShares, 3iQ, and 21Shares bought a relatively smaller amount of the benchmark crypto token.
“So far this year investors have favored Bitcoin, comprising 97 percent of the total inflows, despite comprising 83 percent of digital asset management. Ethereum saw inflows of $34 million last week, although investors have been cautious, with little inflows since early December.”
an excerpt from the report read.
Bitcoin Sell-Off Warnings
The investments attempted to put cold waters over an ongoing narrative that projects Bitcoin at lower price levels in the coming sessions. Many analysts believe that the cryptocurrency could break below the $30,000-level to retest targets near $27,500—or lower.
One of them is CryptoQuant CEO Ki-Young Ju, who provided evidence about declining institutional interest in the Bitcoin market. The blockchain analyst treated the BTC inflows into the custodial wallets of Coinbase Premium as a benchmark indicator to measure short-term mainstream adoption of Bitcoin.
“We might see green candles in BTC chart, but those wouldn’t come from institutional investors; it’s from crypto native firms. Coinbase Premium looks not enough to break key resistance levels. Without USD spot inflows, no more bull-run.”
he tweeted on Tuesday.
Mr. Ju provided additional metrics to justify his short-term bearish outlook on Bitcoin. For instance, an indicator that measures Miners’ Position Index—the total number of Bitcoin that flows out of miners’ addresses—alerted about reaching its 8-year high.
When miners oversupply the retail market with Bitcoin against a lower demand, the BTC/USD exchange rate tends to decline—and vice versa.
“This is one of the reasons why I keep my bearish bias.”
said Mr. Ju.
Bitcoin was trading just shy of $35,500 at the time of this writing. Read more to know about its technical setup here.
Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.
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