Bitcoin $BTC is seeing signs of institutional slowdown. But is it really a problem?
Is there a bit of fatigue among institutional investors investing in Bitcoin ? Inflows are slowing compared to last month's boom, and another piece of data seems to signal the arrival of a period of relative calm, after weeks of sophisticated investors literally destroying the buy button on their platforms.
The additional—and interesting—fact concerns the premium Coinbase typically commands compared to the price on Binance and other exchanges. A higher price tends to indicate greater institutional demand— Coinbase dominates that segment, also due to… legal reasons—which, however, isn't there today. And it could signal relative weariness among these investors.
💥Goodbye premiums: are institutional investors slowing down?
We can't be certain, but the signal seems relatively clear. Let's start with Bitcoin ETFs, which for a few days now have been dominated by Ethereum ETFs , signaling a significant appetite among investors for the alt- asset sector rather than for BTC.
The second piece of data, also collected by Coindesk , concerns the price of BTC on Coinbase and other exchanges. When the price is higher on Coinbase, despite active MMs acting as arbitrageurs, it's still a clear sign of greater institutional interest in this market.
Now the premium has disappeared —a relatively rare occurrence—and possibly a sign of understandable fatigue for at least two reasons. The first is the large volume of investments recorded over the past few weeks, during which we have actually experienced a very unusual period in terms of inflows.
The second is the approaching dead end of the summer market. August has never been a great month for volumes. And if this trend continues, we could see a decline in trading on exchanges and even through ETFs , only to pick up again in September .
💥Is it necessarily a problem?
No, on the contrary. The fact that a potential institutional slowdown—which could be temporary anyway—hasn't significantly damaged BTC's price is a very good sign.
As of this writing, BTC remains at $119,000. And even in mid-July, as the attached chart shows, we saw a slowdown in the premium. This coincided with less than stellar investments in ETFs, but it still didn't cause any major disruptions to the BTC price.
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