Institutional Investors Drive Bitcoin Demand, CryptoQuant Reveals Trends

TLDR

• Institutional demand for Bitcoin remains strong, with 577,000 BTC added to wallets holding between 100 and 1,000 BTC in the past year.
• The increase in Bitcoin holdings by this cohort has risen by 33% over the last two years, coinciding with the launch of spot Bitcoin ETFs.
• Spot Bitcoin ETFs in the United States have seen a net inflow of $1.2 billion in 2023 despite Bitcoin’s modest price gain.
• Corporate treasuries, led by Michael Saylor’s strategy, have acquired 260,000 BTC since July, worth approximately $24 billion.
• Bitcoin holdings by corporate vaults have increased by 30% in the last six months, surpassing miner supply and reaching 1.1 million BTC.

Bitcoin continues to attract institutional interest, according to CryptoQuant. Recent data shows that Bitcoin accumulation by wallets holding between 100 and 1,000 BTC has increased. This suggests that institutional investors remain focused on cryptocurrency.

Institutional Investors Lead the Charge

CryptoQuant’s founder, Ki Young Ju, highlighted that 577,000 BTC has been added to these wallets in the past year. This group includes Bitcoin exchange-traded funds (ETFs), which have gained popularity in the United States. “Institutional demand for Bitcoin remains strong,” said Ju, indicating that large-scale investors are continuing to enter the market.

The increase in Bitcoin held by this cohort has risen by 33% over the last two years. This period coincides with the launch of the first spot Bitcoin ETFs in the United States. Ju explained that, excluding exchanges and miners, this metric offers insight into the institutional demand for Bitcoin.

In 2023, spot Bitcoin ETFs in the United States saw a net inflow of $1.2 billion. Despite Bitcoin’s price only gaining 6% in the same period, these funds have remained popular. Institutional investors appear to prefer these ETFs, as they allow exposure to Bitcoin without the complexities of managing custody and storage.

Institutional activity in Bitcoin is gaining momentum. “Institutions just began to invest in Bitcoin and Ethereum,” stated political economist Crypto Seth. He believes that the investment wave is only at its beginning, with long-term demand expected to grow into the 2030s.

Corporate Treasuries Add to Bitcoin’s Growing Appeal

Part of the increased institutional demand can be attributed to corporate treasuries. Led by Michael Saylor’s strategy, Crypto DATs have acquired 260,000 BTC since July. These purchases, worth roughly $24 billion, show the growing interest of corporations in Bitcoin.

According to Glassnode, corporate holdings of Bitcoin have risen by 30% in the last six months. The influx of Bitcoin into these corporate treasuries surpasses the supply from miners. As a result, corporate vaults now hold more than 1.1 million BTC, solidifying the trend of institutional investors’ long-term positioning in Bitcoin.

Despite the increasing demand from institutions, retail traders have shown more caution. The Bitcoin Fear & Greed Index recently dropped to “fear” territory, signaling a shift in sentiment among smaller traders. However, institutions remain active, continuing to accumulate Bitcoin even during periods of market uncertainty.

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