Bitcoin stays below $60K despite increased transfer volume and institutional adoption
|- Bitcoin's price hovers around $59K as increased transfer volume indicates a stable demand among investors.
- CryptoQuant data indicates buyers are absorbing the panic selling pressure around the $57K price level.
- Bitwise's latest report suggests that institutional investors are still buying Bitcoin despite the recent price decline.
Bitcoin is up nearly 1% on Tuesday as CryptoQuant data shows buyers have been absorbing panic selling pressure since the recent market crash. This is also evidenced in Bitwise's report, which reveals that institutional investors are still buying Bitcoin despite the recent price decline.
Bitcoin transfer volume surges as larger investors acquire more BTC
Bitcoin's price has been hovering around $59K in the past week despite increased transfer volumes and panic selling from smaller investors. The selling pressure caused the average BTC daily trading transfer volume to rise from $650K to $765K.
According to data from CryptoQuant, the resilience in BTC's price suggests that buyers are effectively absorbing the panic selling pressure of these smaller investors, particularly around the $57,000 price level.
This behavior also shows an increased demand for Bitcoin among larger investors who are focused on acquiring more Bitcoin at its current "attractive price." This attitude from large holders suggests a sustained recovery may be imminent for Bitcoin.
CryptoQuant data coincides with Tether Treasury's move to mint $1 billion USDT on the Tron blockchain. This is often interpreted as a bullish sign, as a hike in USDT supply often correlates with rising prices for Bitcoin and the crypto market.
Additionally, Bitwise's latest report indicates that institutional investors have continued to purchase Bitcoin ETFs, undeterred by the asset's recent price declines.
The report suggests that 10% of all Bitcoin may be owned by institutional investors, considering the latest form 13F filings from issuers indicated increasing investor interest in Bitcoin ETFs in Q2.
The total share of assets under management of Bitcoin ETFs among institutions also rose from 18.74% to 21.1%, closing the quarter with $11 billion in Bitcoin ETF holdings.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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