Despite the unstable market, institutional investors are significantly increasing their crypto holdings. According to CryptoQuant, a leading analysis firm, the crypto market is experiencing its second-largest phase of institutional accumulation in 2024, marking a critical moment for broader crypto adoption.
Data from CryptoQuant reveals that institutional investors are buying cryptocurrencies on a large scale, especially those whose prices have recently dipped. “We saw an accumulation of about 101,600 BTC last week, with a notable trend of low volume in ETFs and falling prices,” explains Cauê Oliveira, an analyst at CryptoQuant.
Oliveira emphasizes that this behavior indicates growing confidence among institutional investors in the long-term value of cryptocurrencies. The substantial purchases suggest that these investors view current price levels as a favorable entry point, despite the market’s recent volatility.
This wave of buying could have a significant impact on the overall market. It may lead to increased stability and a potential upward trend in prices over the medium term.
Echoes of the 2020 Bitcoin Rally
Ki Young Ju, the CEO of CryptoQuant, recently pointed out striking similarities between current Bitcoin network activities and those observed before the impressive rally at the end of 2020. Despite moderate volatility, data shows daily transactions exceeding a billion dollars moving into “whale” wallets.
This steady accumulation pattern is reminiscent of mid-2020, when Bitcoin hovered around $10,000 for several months before embarking on a steep rise.
Unlike the initial phase when Bitcoin ETFs were introduced and accumulation was driven by fund issuances, the current phase seems to reflect genuine opportunistic buying by major players in the market.
Implications for the Crypto Market
In conclusion, the significant institutional accumulation observed in 2024 could signal the beginning of a new growth phase for the crypto market. The influx of institutional investments may lead to greater market stability and set the stage for a bullish trend in the medium term.