At the beginning of the year, the dominant narrative permeating cryptocurrency markets was that institutions were going to add large swaths of bitcoin to their assets. Big, established investors from hedge funds to Wall Street mainstays and blue-chip companies would be quick to jump on the bandwagon.
Now, as bitcoin (BTC) trades close to half of the all-time high of almost $65,000 reached in April, things are starting to look slightly different: Despite what looks like a clearance sale on the cryptocurrency, data shows that institutions have shown a reluctance to take advantage of the bargain, apparently rattled by the same concerns that have pushed prices down.
Bitcoin “whale” addresses – those holding 1,000 BTC or more – tumbled to about 2,150 in May from almost 2,500 in February, according to the blockchain-analysis firm Coin Metrics. Since then, the number has languished around that lower level.
Glassnode, another blockchain analysis firm, noted in a report on Monday that a stagnation in the balance of bitcoins held on the cryptocurrency exchange Coinbase offers another view of the same dynamic.
CoinDesk reported last week that open positions in bitcoin futures had tumbled by 59% from an April 13 peak, an indication that institutional investors are being cautious.
“Institutional demand appears to remain somewhat lackluster,” Glassnode wrote in its Monday report.
The latest data might show why bitcoin has been stuck between $30,000 and $40,000 for the past month, after prices had risen over the past year partly on the expectation that a wave of new buyers was set to come in.
Source: CoinDesk