Institutions are losing interest in cryptocurrencies as the market goes through a bleak period.
According to the latest report from Glassnode, institutional investors are slowly losing interest in Bitcoin. Proof of this is the level of activity of the Grayscale Bitcoin Trust (GBTC).
It can be said that the main driver for Bitcoin price momentum in 2020 and 2021 comes from strong demand from large institutions. One of the biggest examples is the amount of ‘deposits’ in the GBTC trust fund and the high premium spread in 2020-early 2021.
However, the total number of Bitcoins in two popular ETFs, Purpose and 3iQ, recently dropped sharply. Last month, a total of 8,037 BTC “flowed” out of these two ETFs.
However, 3iQ fund CEO Fred Pye said this is only a sign that investors have successfully taken profits.
“There is no slowdown here. The company has met with hundreds of potential customers in the past two weeks alone,” said Fred Pye.
Glassnode also further noted the change in Bitcoin balances on Coinbase – the preferred exchange of US institutional investors during the bull market. After a period of maintaining a high level, since December 2020, the Bitcoin balance on this exchange has decreased markedly.
“Given the observations of GBTC premium, net outflows from ETFs, and Bitcoin balances on Coinbase, it can be confirmed that demand for crypto from institutions is waning,” the report concludes.
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