institutional investment

Institutional Adoption is Playing a Part in the Next Leg of Ethereum’s Bull Run

Ethereum’s previous bull run, which saw a record-high of $4,350 hit, boosted the booming non-fungible token (NFT) and decentralised finance (DeFi) sectors.

Dan Tapiero, the CEO of 10T Holdings, believes that institutional adoption is propelling the next leg of Ethereum’s bull run. He explained:

“Institutional adoption of Ethereum driving the next leg of the bull market in crypto. NYDIG, Fidelity, Cathie Wood’s Ark all moving in.”

Tapiero acknowledged that some of the leading institutional investors in the Ethereum network included Fidelity Investments, Ark Invest, and NYDIG.

Institutional investment has been pivotal in making Bitcoin (BTC) scale the heights. For instance, it was the engine behind Bitcoin’s all-time high (ATH) price of $64.8K recorded in mid-April.

American business intelligence firm MicroStrategy has led the park in Bitcoin investment based on its 105,085 BTC holdings. Therefore, institutional investment trickling in the Ethereum network is bullish.

The number of Ethereum addresses holding more than 10 ETH increases

According to crypto analytic firm Glassnode:

“The number of Ethereum addresses holding 10+ coins just reached a 4-month high of 272,881.”

On the other hand, Ethereum whales have been on an accumulation mode because addresses with at least 100,000 ETH accounted for 43.7% of the network supply.

These statistics indicated that Ethereum whales’ accumulation had been on an upward trajectory because they owned 35.8% of ETH supply three years ago compared to the present 43.7%.

ETH was recently boosted after the London Hardfork or EIP 1559 was implemented because a base fee for every transaction carried out was set. As a result, giving all a fair opportunity.

Furthermore, users who may wish to conduct their transactions faster than the standard provisions of the network were allowed to tip validators to fast-track their transactions.

With institutional investment entering the Ethereum network, whether this will trigger the next bull run remains to be seen.

Bitcoin Needs to Break $51K Level for an Continuous Upsurge

Bitcoin (BTC) roared above $50K on August 23 for the first time since May as institutional investors give the leading cryptocurrency a keen eye. Nevertheless, BTC has retracted to $49,738 during intraday trading, according to CoinMarketCap.

Market analyst Michael van de Poppe believes Bitcoin should break the $51,000 level if an upward momentum continues, failure to which a pullback to the $44-$48K level will be witnessed.

He added that at a fast pace, BTC ought to accelerate to the $56K level.

With the latest surge pushing Bitcoin above $50,000, on-chain dynamics have changed as more users accumulate. On-chain metrics provider Econometrics explained:

“Good news. Compared to February, when Bitcoin crossed $50K for the first time, the on-chain dynamic has changed. In February, less and less people were accumulating. Now, more and more people are accumulating.”

Institutional investor sentiment rises

Institutions have been injecting capital investments in the Bitcoin market, which has been instrumental in increasing price. Recently, addresses holding more than 1,000 BTC reached a 6-month high, which illustrated strong conviction.

In May, Bitcoin experienced bearish momentum as the top cryptocurrency nosedived to lows of $28K from an all-time high (ATH) price of $64.8K recorded in mid-April.

Institutional investment played a pivotal role in the realization of this record-breaking price.

Meanwhile, Bitcoin experienced the largest exchange inflows and outflows on August 23 since BlackThursday in March last year. Crypto analytic firm Santiment stated:

“Monday had the largest amount of Bitcoin cycling on & off exchanges since BlackThursday, 17 months ago. Approximately 843.2K BTC was moved on to exchanges, and 825.0K BTC was moved off.”

Black Thursday is a day remembered because the financial market suffered the greatest single-day fall since the 1987 stock market crash as the coronavirus (Covid-19) pandemic continued to wreak havoc globally. For instance, BTC shed off 50% of its value and plummeted to lows of $3,800.

Institutions Accumulating Bitcoin as BTC’s Adoption Rate Surpasses the Rate of Internet

Institutions have been injecting capital for investments in the Bitcoin market, which is instrumental in increasing price.

Lucas Outumuro, the head of research at IntoTheBlock, explained:

“On-chain data shows institutions have been accumulating Bitcoin with the amount of volume in addresses with over 1K BTC reaching 6-month highs. This volume has grown as the price has gone up in the past month, showing strong conviction.”

Institutional investment played a pivotal role in enabling Bitcoin to hit an all-time high (ATH) price of $64.8K in mid-April. Leading American business intelligence firm Microstrategy is among leading corporate giants with a sizable amount of BTC.

In July, the company revealed that it would continue to deploy funds to invest in its digital asset strategy amid holding 105,085 BTC. Therefore, the institutional accumulation of Bitcoin is a bullish sign.

Bitcoin’s adoption rate tops that of the internet

Crypto analyst Carl Martin noted that Bitcoin was being adopted faster than the internet.

It shows more participants are joining the BTC bandwagon.

As a result, leading banks are eyeing a share of the Bitcoin cake based on some of the services that are coming up.

For instance, Wells Fargo Investment Bank recently registered for a passive BTC fund with the US Securities and Exchange Commission (SEC) to provide its wealthy clients with an indirect vehicle for investing in cryptocurrency.

Therefore, this is a significant step in crypto acceptance as an asset class, enabling ownership of Bitocin that these efforts contributed by major banks and proving that clients are eager to demand and exposure to cryptocurrency.

On the other hand, more BTC is moving into long-term hodler categories, as acknowledged by market analyst Jan Wuestenfeld.

As more institutional investment continues to trickle into the Bitcoin network, whether this will ignite the fire towards hitting the $100K target by the end of the year remains to be seen.

Bitcoin Revisits $50K Amid More Than 1 Million BTC Addresses Transacting

After roaring above $50K on August 23 for the first time since May, Bitcoin (BTC) revisited this level in the last 24 hours even though the leading cryptocurrency had retracted to $49.9K during intraday trading, according to CoinMarketCap.

This price surge also saw an uptick in addresses transacting, given that they hit a two-month high. Crypto analytic firm Santiment explained:

“With Bitcoin’s visit above $50,000, we also saw the first day that over 1M addresses were interacting on the BTC network in 2 months.”

Ali Martinez echoed these sentiments that large transactions were being witnessed on the Bitcoin network. The market analyst acknowledged:

“BTC whales and institutional players are back! Bitcoin shows an important uptick in the number of large transactions on the network with a value of $100,000 or greater. Roughly 24,000 large BTC transactions have been recorded today.”

Bitcoin exits exchanges in droves

Bitcoin’s transaction volume recently reached a monthly high of 47,433.025 BTC. The leading cryptocurrency has been leaving crypto exchanges at a high rate as the balance continues to diminish.

On-chain analyst Lark Davis believes this could signal the return of institutional money. He noted:

“Huge outflows of Bitcoin from Coinbase = institutional money is once again gobbling up BTC!”

Institutional investment played a pivotal role in enabling Bitcoin to breach the previous all-time high (ATH) of $20,000 in December 2020, a fate the top cryptocurrency had been trying in vain for three years.

The injection of more capital investments also enabled BTC to hit a record high of $64.8K in mid-April.

Bitcoin Transaction Volumes Continue to Reflect Trickling in of Big Money

Institutional-sized investments continue trickling into the Bitcoin (BTC) network, as acknowledged by Yann & Jan.

The co-founders of on-chain metrics provider Glassnode explained:

“Bitcoin transaction volumes continue to reflect big money moving in the space. Institutional sized capital ($1M+ transaction sizes) represents around 82% of settled volume over the past week. Note the growth in institutional size capital really kicked off in October 2020.”

Institutional investments have played an instrumental role in Bitcoin’s journey towards record high prices. For instance, big-money moves enabled the leading cryptocurrency to hit an all-time high (ATH) price of $64.8K in mid-April.

Some of the corporate giants leading the institutional investment race include leading American business intelligence firm MicroStrategy. This company committed $242.9 million to purchase a new batch of Bitcoin, bringing its total holdings to 114,042 BTC.

On the other hand, long-term BTC holders or older hands have also been notable investors. Yann & Jan acknowledged:

“Older hands are still not spending their coins. The average age of spent outputs continues to decline, showing they still have conviction, even when markets look the most intimidating.”

Bitcoin accumulation witnesses an uptrend

According to Rafael Schultze-Kraft, Bitcoin accumulation has been rising. The on-chain analyst noted:

“Bitcoin accumulation score by cohort. Those blue tones we’re starting to see again in recent weeks? Yes, increased accumulation across cohorts. Very bullish if we see this trend continue.”

Even though BTC whales have consistently dropped since February, the remaining ones have been on a buying spree.

Data insight provider Arcane Research explained:

“While the number of whales has dropped consistently since Feb 8th, the value these addresses hold stopped its decline in March and has been trending upwards since. The remaining whales are accumulating.”

Therefore, it shows Bitcoin holding is a favoured strategy, which is bullish.

Bitcoin’s Institutionalization Increases 4-Fold to Hit Weekly Average of $1.9T

Since institutional investments started trickling into the Bitcoin (BTC) network, the leading cryptocurrency has prompted exponential growth.

Market insight provider IntoTheBlock confirmed:

“Bitcoin’s institutionalization: Large transaction volumes act as a proxy to institutional and “whales” activity. The aggregate volume transferred in transactions of over $100k increased by a factor of 4 from an average of $ 450B per week in January to $1.9T in November.”

MicroStrategy, an American business intelligence firm, has been leading the pack in institutional investments based on its continuous BTC accumulation. For instance, it recently bought an extra 7,002 Bitcoins, bringing its portfolio to more than 121,000 BTC.

The firm’s CEO, Michael Saylor, acknowledged that Bitcoin was the principal asset in its treasury reserves because it showcased itself as a legitimate investment vehicle superior to cash.

On the other hand, MicroStrategy is contemplating lending out its BTC holdings to generate yield.

Considerable selling pressure from Asia might be behind the current correction

According to Bitcoin researcher at Glassnode, Johannes:

“Bitcoin price movement by working hours reveals an unprecedented amount of selling from Asia as a force behind the current downturn.”

On December 4, Bitcoin slipped to lows of $42K as massive liquidations engulfed the market, resulting in the second-largest daily shed off this year.

Since then, the top cryptocurrency has been ranging between the $46K and $50K levels. Therefore, it remains to be seen how Bitcoin plays out even though a bullish divergence is being witnessed from a macro scale.

On-chain analyst Matthew Hyland explained:

“Bitcoin market value to realized value ratio (ON-CHAIN) is seeing bullish divergence being created on the macro scale. MVRV is the ratio between market cap and realized cap. The last time it created bullish divergence, it led to A move from $30k to $69k.”

Whether a breakout will happen in the Bitcoin market, remains to be seen because the multi-month downtrend witnessed on the momentum indicator recently reached an inflexion point.

Large Institutional Transactions Take the Lion’s Share of Bitcoin Volume at 99%

Institutional demand for Bitcoin (BTC) does not seem to be fading based on the large transactions volume witnessed, according to a report by IntoTheBlock.

The study noted:

“Currently over 99% of all Bitcoin volume comes from transactions of over $100k, dubbed large transactions. The dominance of institutions and change in market structure accelerated in Q3 2020.”

Large transactions volume has been the norm in the Bitcoin market since the third quarter of 2020 because they have remained above 90%, per the report.

Institutional investments have played an instrumental role in revolutionizing the BTC ecosystem. For instance, they enabled the leading cryptocurrency breach the then all-time high of $20,000 in December 2020 after three years of waiting.

Since then, Bitcoin has been on a record-breaking streak, with the last historic high price of $69,000 set in November last year.

IntoTheBlock acknowledged that Bitcoin interest from tech and traditional finance institutions continues to grow exponentially, given that both new entrants and existing ones are not relenting on this asset.

For instance, some of the investments that have taken the crypto world by storm so far this year include Pantera Capital and Bain Capital, raising $1 billion and $560 million for crypto funds, respectively.

IntoTheBlock also noted that many addresses holding crypto continued going through the roof. The data analytic firm explained:

“Bitcoin addresses with a balance reached a record of nearly 40 million. Addresses holding Ether have outpaced this, with over 70 million having a positive balance of the smart contract platform’s native token.”

This correlates with the fact that Bitcoin hodlers remained unfazed despite the top cryptocurrency recently hitting lows of $34,000 based on accumulating more coins.

Institutional Crypto Exposure Hits 51%, Goldman Sachs Study Shows

Out of 172 institutional clients surveyed, leading global investment bank, Goldman Sachs found out that 51% of them had crypto exposure, according to a report published by Arcane Research.

The survey noted that institutional interest in cryptocurrencies was witnessing strong growth because crypto exposure rose from 40% in 2021 to 51% in 2022.

Source: Arcane Research

Furthermore, this growth is expected to increase. Per the report:

“Of the 172 surveyed clients, 60% responded that they expect to increase their digital asset holdings in the next one to two years.”

Goldman Sachs eyes rolling out crypto investment services

Goldman Sachs has been gearing up for the crypto space in recent weeks, given that its website is giving digital assets a keen eye.

The newly appointed global head of digital assets at Goldman’s private wealth management division, March Rich, recently disclosed that the bank was considering availing a “full-spectrum” of crypto investments through derivatives, physical Bitcoin, or traditional investment vehicles.

Therefore, Goldman Sachs is edging closer to rolling out its first investment vehicles for crypto assets for clients in its private wealth management group.

Rich noted:

“Some Goldman clients feel like we’re sitting at the dawn of a new Internet in some ways and are looking for ways to participate in this space.”

She added:

“We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private equity clients, and that is something we look forward to delivering in the near term.”

The bank recently disclosed that it was looking at ways of meeting increasing client demand to own and invest in Bitcoin while still staying on the right side of the law, Blockchain.News reported.

Shinhan bank Opens Door to Corporate Crypto Accounts, Paving the Way for Institutional Adoption

As the first domestic lender on South Korean soil, Shinhan Bank has rolled out real-name corporate accounts to enable transactions from cash to crypto-based on its partnership with cryptocurrency exchange Korbit.

Local regulations made this venture a reality by allowing bank-partnered and licensed crypto exchanges to render cash-to-crypto services.

Furthermore, the passage of the Reporting and Use of Certain Financial Transaction Information Act extended counter-terrorism and anti-money laundering financing regulations to digital asset service providers.

The bank acknowledged that it averted such risks through the Shinhan-backed custody service KDAC.

Digital asset custody is a service that safely manages and stores digital assets owned by various organizations and entities. Therefore, the corporations taking part in the project are chosen by Shinhan Bank and are members of Korea Digital Asset Custody (KDAC).

With the incoming South Korean President, Yoon Suk-yeol pledged of easing crypto regulations; analysis shows the market is on a solid path to being significantly legitimized.

As a result, local banks in the nation intend to ride this wave while seeking authorization to enter the crypto space through their representative body called the Korea Federation of Banks.

The banks had raised concerns that the crypto market in the country could be monopolized because a “certain local crypto exchange” accounted for 90% of the market share.

Given that crypto taxation has been a burning issue in South Korea since its parliament tabled a bill in 2020 where cryptocurrency gains would be slapped with a 20% gain, the incoming president vowed to zero tax crypto trading gains not exceeding 50 million won, approximately $40,000.

Investcorp Rolls out First Institutional Blockchain Fund in the Gulf

Investcorp, a global manager of alternative investment products, has launched the first institutional blockchain fund in the Gulf Cooperation Council (GCC) aimed at propelling a blockchain-powered digital evolution.

Dubbed Lydian Lion, the blockchain fund also has a global investment mandate. It will be mainly rolled out to early-stage companies within the blockchain ecosystem in areas like data analytics, decentralized finance, platforms and exchanges, and blockchain infrastructure.

Gilbert Kamieniecky, the head of Investcorp’s technology private equity business, noted that the fund would be a stepping stone towards more innovations in the blockchain space as the digital economy continues to gear up. He acknowledged:

“We believe that blockchain technology and the ecosystem around it, will transform every facet of our economy much like the internet did in the 2000s.”

Kamieniecky added:

“We have already seen the potential of blockchain to disrupt existing markets and create new ones, such as the meteoric rise of the non-fungible tokens market that in just a few years has grown from under a billion to more than $40 billion.”

As a fast-growing technology area, Hazem Ben-Gacem believes blockchain technology should be accorded more global reach and institutional expertise.

The Co-CEO at Investcorp added:

“Offering our clients innovative and bold investment ideas, backed by our disciplined and proven approach, has been a key element of our success over the last four decades.”

The GCC is a political and economic alliance of six Middle East nations: the United Arab Emirates (UAE), Kuwait, Oman, Saudi Arabia, Bahrain, and Qatar.

Meanwhile, a recent survey by Goldman Sachs, a leading global investment bank, noted that institutional interest in cryptocurrencies was witnessing strong growth because crypto exposure rose from 40% in 2021 to 51% in 2022.

Furthermore, inflows into crypto investment products reached $193 million, a scenario that was last seen in mid-December 2021, according to digital asset management firm Coinshares.