Institutional investors are losing interest in Bitcoin, the market needs a big shock in order to
With the market moving sideways and investor sentiment showing no signs of slowing, institutional demand, a hugely important factor in Bitcoin’s growth, appears to be slowing.
A Glassnode report shows that institutional investors are slowly losing interest in Bitcoin. Evidence of this can be found by tracking the activity of the Grayscale Bitcoin Trust (GBTC).
The main driver behind the rise in the price of Bitcoin in 2020 and 2021 is the strong actual demand from large institutions. One of the biggest factors that led to this is the inflow to Grayscale’s GBTC trust, the high premium spread observed in 2020 and early 2021.
As of February 2021, the GBTC product traded at a constant discount to net asset value (NAV), hitting its lowest discount of -21.23% in mid-May and rising this week between a low of -14.44% and a high of -4 .83% compared to the NAV.
The largest GBTC share release, which hits the market in July, is a major event. There are two opposing views to be considered on whether Bitcoin can repeat history with Grayscale’s biggest trigger of the year like it did in February, or drop straight to $ 25,000 from the perspective of financial giant JP Morgan. We have to follow up in the near future.
See more: Bitcoin entered a bear market – but when will it end?
Another key indicator is Grayscale’s GBTC trust, which currently holds over 651,500 BTC, which is a whopping 3.475% of the circulating bitcoin supply.
Next up are the prominent Bitcoin ETFs. There are two prominent Bitcoin ETFs in Canada:
- The purpose of Bitcoin ETF
- 3iQ QBTC ETF
These two funds continued to grow rapidly across the BTC under management. With a net inflow of 3,929 BTC as of May 15th. This corresponds to a daily inflow of 95.83 BTC / day and brings the total ETF holdings to 21,597 BTC.
The QBTC ETF has seen significant net outflows over the past two months. The total BTC stocks in particular have decreased by a total of 10,483 BTC in the past two months.
This reduces the current BTC stocks to 12,975 BTC. Therefore, the purpose ETF has to “help” the QBTC ETF in relation to the total amount managed. However, if you add up the net outflows of both ETFs over the last month, a total of 8,037 BTC have flowed out of these ETF products.
Finally, let’s take a look at the net change for Coinbase, a favorite spot for US institutions during the bull market. After a sustained period of net cash flow since December 2020, the change in the Coinbase balance has decreased significantly.
The data in particular show that the needs of large organizations still seem a little bleak. From this it can be concluded that the market needs a strong shock from this factor in order to end the current “cool” phase and start a new growth cycle.
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