US institutions account for 85% of Bitcoin purchases in ‘very positive sign’ — Matrixport
Institutional investors are “not giving up on crypto,” with recent data pointing to as much as 85% of Bitcoin purchases resulting from US institutional players, according to Matrixport’s chief strategist.
Markus Thielen, the head of research and strategy at the financial firm, told Cointelegraph that the evidence shows that institutions are not “giving up on crypto” and is an indicator that we may be entering a new “crypto bull market now.”
The data was shared in a Jan. 27 report from Matrixport, which suggests that a distinction can be made between whether a digital asset is more favored by retail or institutional investors at any given time based on whether that asset performs well in the US or Asia. opening hours.
The report stated that if an asset that trades 24 hours “does well” in US trading hours, it indicates that US institutions are buying it, while an asset that sees growth in Asian trading hours indicates that Asian retail investors are buying it.
The report cited that Bitcoin (BTC) is up 40% this year, with 35% of those returns occurring during US trading hours, meaning there is an “85% contribution” linked to US-based investors, indicating that US institutions are buyers of Bitcoin right now.
Thielen added that past data shows that institutions usually first start buying Bitcoin before investing in other cryptocurrencies. He noted:
“If history is any guide, we should see better performance of Tier 1 and altcoins relative to Bitcoin.”
While the report highlighted that news about other projects positively affected token prices such as Lido DAO (LDO) and Aptos (APT), the crypto rally only started when US inflation data was released on January 12.
It was also mentioned that Ether (ETH) seems to be performing well during US hours, indicating “institutional flows” into the cryptocurrency, but APT is doing well around the clock.
“Aptos sees a mix of strong returns in the US open AND in the Asia open.”
The report concluded that this “should be a very positive sign for Bitcoin” as institutional adoption continues.
Related: Data shows that professional Bitcoin traders want to feel positive, but the rally to $23K was not enough
In earlier comments to Cointelegraph, economist Lyn Alden believes that Bitcoin is currently playing “a bit of catch-up”, returning to where it would have been without the FTX collapse.
Alden warned that there is “significant risk going forward” for the second half of 2023, citing that liquidity conditions are “good right now”, due in part to the US as a significant factor.
Alden explained that while the US Treasury is drawing down its cash balance to keep the country’s debt levels low, it is pushing “liquidity into the financial system.”
Meanwhile, popular trader and market commentator TechDev posted a Twitter update on January 26 showing the price correlation between Bitcoin and gold, stating that if Bitcoin continues to follow the price of gold, it could even “crack the $50,000 mark.”
