Institutions Bet Big on Bitcoin Despite 30% Fall From Peak: Report

Bitcoin's price has stayed below $90,000 this week, indicating a cautious market climate as traders prepare for the Federal Reserve's interest rate decision and a plethora of other macroeconomic and political uncertainties.

Even with a significant fall late last year that led to a roughly one-third decline in Bitcoin's value from its all-time peak, most institutional investors maintain an optimistic outlook on the asset.

Following a decline from more than $126,000 in early October 2025 to a year-end trading price of $90,000, a recent study by Coinbase Institutional and Glassnode reveals that 70% of institutions view BTC as undervalued.

Moreover, 60% of individual investors express this level of confidence.

The findings stem from a survey conducted quarterly from December 10, 2025, to January 12, 2026, involving 148 investors globally by Coinbase and Glassnode.

The study included a total of 75 institutional participants and 73 individual participants.

Most participants opted to hold or expand their crypto investments rather than liquidate them during the October market downturn, which unsettled altcoin markets and decreased leverage on derivatives platforms.

However, a quarter of all investors see a bear market in cryptocurrencies right now. But Bitcoin, according to many in the financial sector, is selling for far less than it is actually worth.

The findings highlight a subtle shift in investor sentiment in response to a wide range of macroeconomic factors and ongoing volatility in the days so far in 2026.

As the initial rally from January lost steam, the leading crypto has pulled back to the mid-$80,000s over the past week.

Currently priced at around $89,000, Bitcoin's price is largely unchanged from a week ago.

The Market Pulse report from Glassnode indicates that spot volumes have stabilized at a low level, suggesting a phase of consolidation rather than a definitive shift in trend.

The report noted that, alongside increased hedging demand and ongoing sell-side appetite, spot, derivatives, and on-chain indicators have all shifted into a more cautious market atmosphere.

Nevertheless, the increase in negative sentiment did not lead to significant selling activity. The majority of investors maintained their holdings, and the outlook on Bitcoin in particular continued to be positive.

The "Charting Crypto: Q1 2026" report showed the stability of Bitcoin's dominance during the recent fluctuations is noteworthy, with a slight increase from 58% to 59% over the December quarter.

This indicates that larger investors are still showing a preference for the leading digital asset, despite ongoing selling pressure on smaller tokens.

The open interest in BTC options has surpassed that of perpetual futures, as market participants look for downside protection. Meanwhile, the 25-day put-call skew remains positive across 30-day, 90-day, and 180-day expirations.

The optimistic view was borne out by a number of factors.

Inflation has been steady at 2.7% in December, according to the Consumer Price Index, and the Atlanta Fed's GDPNow model predicted robust real GDP growth of 5.3% for the quarter ending January 14.

There are still a lot of unanswered questions about the big picture of Bitcoin market laws, but many are hopeful that regulations will become clearer in the future.

In addition to the survey, other data indicate a growing involvement from institutions across various channels.

With Bitcoin reaching new peaks and US regulations nearing broad acceptance in 2025, the allocation of financial professionals in cryptocurrency rose to 32%, up from 22% the year before, as indicated by a Cryptonews.com poll.

Separately, the percentage of financial advisors who advised clients to invest in cryptocurrencies increased to 32% in 2025 from 22% in 2024, according to a new poll by Bitwise and VettaFi.

With 42% of the total, this occupation has the highest percentage of registered professionals.

Similarly, a recent poll by Coinbase found that 25% of the portfolios of younger investors contain non-traditional assets, compared to 8% of the portfolios owned by older investors.

Coinbase acknowledged future difficulties in their report.

Even though the economy seemed to be doing well, the employment market slowed down in 2025. The US added just 584,000 posts, which is a big decrease from the 2 million generated in 2024. This slowdown was partially caused by the surge in AI use.

Nevertheless, the onchain metrics showed signs of improvement following the shakeout in October.

The supply of Bitcoin shifted significantly over a three-month period, experiencing a remarkable 37% increase in the fourth quarter.

Meanwhile, tokens that had remained stagnant for over a year saw a decline of 2%. This trend suggests a short-term distribution that likely eliminated less committed holders.

Over the course of 2025, Ethereum's Net Unrealized Profit/Loss ratio went through a lot of ups and downs, from a low point in the first quarter to a high point in the third, and back down to a low point in the fourth.

In the past four trading days, Bitcoin has fallen below $90,000, and there have been $1.62 billion worth of ETF outflows; yet, it seems that the commitment from institutions is still solid.

Macro Odds Rather Than a Deeper Trend?

Even beyond the broader institutional outlook, more and more analysts are seeing Bitcoin's recent standstill below $90,000 as a shift in interest rate expectations rather than a sign of falling demand.

Gold and silver have long been regarded as reliable refuges for those looking to safeguard their assets amid geopolitical uncertainties, the looming threat of a US shutdown, tariff discussions, and the heightened earnings risks associated with large-cap stocks.

No one is expecting a policy shift anytime soon, according to current market evaluations and forecasting tools.

At Wednesday's Federal Open Market Committee meeting, the US central bank is expected to likely keep its existing policy, with a 97% chance, according to the CME FedWatch Tool.

The odds of the FOMC meeting ending with "no change" are 99% according to Polymarket bets.

Still, spot Bitcoin ETFs saw inflows on Monday ($6.8 million), the first positive development in five trading days, though Tuesday saw $44.6 million in outflows.

Considering the market instability that has occurred accompanying Bitcoin's precipitous fall below the $90,000 level, the recent net inflows, even though small, suggest that investor mood may have stabilized.

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