Yes, don’t be deceived. There may be rumours of institutional players holding the pause card in the last couple of weeks as bitcoin expressed its volatility, but take that with a pinch of salt.
BTC’s current state is in stark comparison to its performance in the crypto market between the end of last year and the beginning of 2021. Very notable was its fall to $29k three days ago albeit recurving back to above $30k in the shortest possible time. Its pretty funny we think the $29k mark as unacceptable when BTC was at a similar price only thirty days ago.
But regardless of what rumours regarding the non-stimulating behaviour of high-net worth and institutional investors circulate, statistics from Glassnode indicate that the amount of wallet addresses holding a thousand plus BTC continues to increase despite the cryptocurrency’s falling prices.
Quite surprisingly, there was a significant dip in the number of whale accounts in December. But apparently, they’ve been on the rise once more with major institutional player Microstrategy revealing that it had bought BTC again, this time 10 million dollar’s worth (314 BTC).
However, although the number of whale accounts may have risen, there hasn’t been a similar reflection in the ratio of BTC transfers on trading platforms to all bitcoin transfers network wide. This insinuates that large whales may prefer to use over-the-counter deals.
“Only 7% of network transactions are used for exchange deposits and withdrawals, 93% of transactions in the Bitcoin network is used for non-exchange transactions like OTC deals.” – CryptoQuant’s Ki Young Jun
A fourth quarter market report from Malta-based cryptocurrency exchange, OkEx states:
“Institutional investors really piled into the bitcoin space after Paul Tudor Jones announced his entrance, and they didn’t stop as 2020 came to a close…. additionally, we can assume that institutions were on the bidding end of the spectrum and buying large amounts of BTC – as opposed to selling – since the price of the leading cryptocurrency rose in a parabolic fashion throughout Q4 2020.”
But we can safely assume that institutional interest in Bitcoin will not vanish anytime soon. Considering how investors usually think long term, Bitcoin’s current struggle is unlikely to deter them, with many even seeing it as yet another opportunity to join the “game”.