Institutional-grade investors appear to be slowing down on Bitcoin purchases, according to data compiled from 17 reputable exchanged by Kaiko, a market data provider, on Mar 30.
USD Flowing to BTC Falls
For the better part of Q1 2021, institutional demand for Bitcoin as gauged by BTC-USD trading volumes via regulated exchanges fell from 37 to 27 percent.
According to Kaiko, the BTC-USD and BTC-USDT trading ratio can indicate institutional inflows into crypto.
This is assuming that deep-pocketed investors would prefer to use regulated crypto ramps like Coinbase over Binance for BTC purchases.
The Rush to Bitcoin of H2 2020
Coinciding with the sharp spike of prices at the tail end of 2020 was an influx of institutional investors, acquiring large chunks of Bitcoin using their cash reserves.
From Sept 2020, MicroStrategy–a NASDAQ-listed company, began acquiring Bitcoin.
At the same time, other projects, including Square, Mode Global, PayPal, and later Tesla, announced either mega purchases of Bitcoin or plans of integrating BTC and crypto in their operations.
Hedging against Debasement
The increasing exposure of Bitcoin also saw higher inflows from retailers to exchanges like Binance supporting leading stablecoins, including USDC and USDT.
Meanwhile, in the United States–amid fiat debasement, central banks’ intervention, and helicopter money, institutions began flocking to regulated facilitators like Grayscale Investment.
Others opted for direct purchases through Coinbase, with one of the largest known, institutional clients being MicroStrategy and Tesla.
Coinbase is also behind Meitu’s purchase of BTC and ETH. The Hong Kong-listed, Xiamen-based software company has purchased $90 worth of BTC and ETH. Most notably, it is the first public firm to hold ETH as part of its treasury.
Focus on Bitcoin ETFs
Despite the noted slump in institutional participation, retailers are positioning themselves, ready to clip the next wave of higher highs.
Most BTC traders trade using USDT—a leading stablecoins, primarily via exchanges outside U.S. regulators. The issuer of USDT, Tether Limited, settled with the New York Office of the Attorney General.
Also, as BTCManager reports, institutions are angling for BTC derivatives products with an immediate focus being on Bitcoin ETFs, GBTC products, and ETPs.