Bitcoin [BTC] price has been stalling in the $8800-$9000 range, as traders in the space are working to fathom the bullish or bearish narrative. Apart from that, in the past, there has been also debating around retail vs. institutional factors driving the markets. The crypto bubble in 2017 was essentially led by retail demand, and eventually, burst with the launch of a regulated futures market by Cboe and CME.
Nevertheless, Mati Greenspan, financial and crypto analyst and founder of Quantum Economics marks a tell of how things have changed in the last two years. The downtrend in the weekend and holiday trading volumes is indicative of Bitcoin adoption in the mainstream trading avenues. He notes in his daily newsletter,
To me, this is very telling of exactly who has been driving the bitcoin market lately. Back in 2017, when it was retail investors running the show, it was very common to see large surges in volume during the weekends, because that’s when people were off work and had time to trade.
The spike during the coronavirus sell-off and the deflation during the long weekend for Memorial Day’s holiday seems to point towards dominant institutional involvement in the crypto markets.
The rise of open interest in CME derivatives (futures and options) is consistent with the narrative as well.
The Asset Under Management (AUM) on Grayscale had been in line with the price action during the 2017 bubble and the following bear market. However, it has seen considerable growth in the last year, with the value now surpassing $3.2 billion. Note only accredited investors and institutions are allowed to trade on Grayscale and CME.Advertisement
Bitcoin [BTC] failed to break above the swing highs around $10,500 and the bearish channel from 2019 holds as well. Nevertheless, the uptrend from after the Black Thursday crash is still intact retaining short term bullish narratives. He tweeted yesterday,
Bitcoin has held support well over the weekend and I’m getting back in heavily. Will get out if support breaks but with the stock markets are risk-on and I’m feeling good today.
The bullishness in the stock markets and the reopening of the world economy with the lock-down phasing out across the world is building the appetite for risk among investors. Mati Greenspan’s portfolio currently comprises of Bitcoin (dominant), followed by Ehtereum, Tezos and Zcash.