On-chain indicators do not fully reflect the demand for Bitcoin from institutions

Bitcoin had a record closing month in June, but experts believe that on-chain data is missing the true scale of buying demand from institutions through ETFs and OTC trading desks.

The difference in institutional trading

Although traditional on-chain data shows weak buying demand, funds #BitcoinETF in the U.S. still recorded nearly $4 billion in inflows in June, indicating strong demand from institutions.

This occurs because most institutional purchases happen discreetly, off-chain, or through OTC trading desks, designed to handle large volumes without disrupting the market. Therefore, traditional on-chain indicators often fail to capture the true scale of capital flows from institutions.

Limitations and prospects

Kony Kwong, CEO of GAIB, stated: "The large-scale buying of Bitcoin by institutions does not show up on conventional on-chain indicators. This disconnect makes demand appear weaker, even as capital continues to flow through institutional vehicles."

Even after the Bitcoin Halving event in April 2024, the price of Bitcoin did not immediately rise as expected. However, the lack of on-chain liquidity for institutional demand is driving other networks like Sui to help facilitate access to Bitcoin DeFi. This indicates the potential for developing new solutions to meet the increasing demand from institutions. #BTC