US institutions account for 85% of Bitcoin buying in 'very positive sign' — Matrixport

Published at: Jan. 27, 2023

Institutional investors are “not giving up on crypto,” with recent data pointing to as much as 85% of Bitcoin buying being the result of American institutional players, according to Matrixport’s chief strategist.

Markus Thielen, the head of research and strategy at the financial services firm, told Cointelegraph the evidence shows that institutions are not “giving up on crypto” and is an indicator that we might be entering a new “crypto bull market now.”

The data was shared in a Jan. 27 report from Matrixport, which suggests that it can be distinguished whether a digital asset is more favorable by retail or institutional investors at any given time based on whether that asset is performing well in the United States or Asian trading hours.

The report stated that if an asset that trades 24 hours “performs well” during U.S. trading hours, it indicates that U.S. institutions are buying it, while an asset that sees growth during 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 U.S. trading hours, meaning there is an “85% contribution” associated with U.S.-based investors, indicating that U.S. institutions are buyers of Bitcoin right now.

Bitcoin Fear and Greed Index is 55 - GreedCurrent price: $23,033 pic.twitter.com/OAt0TakkZR

— Bitcoin Fear and Greed Index (@BitcoinFear) January 27, 2023

Thielen added that previous data shows that institutions typically first start buying Bitcoin before investing in other cryptocurrencies. He noted:

“If history is any guide, then we should see the outperformance of layer 1 and altcoins relative to Bitcoin.”

While the report highlighted that news regarding other projects positively impacted token prices such as Lido and Aptos, the crypto rally only started once the U.S. inflation data was released on Jan. 12.

It was also mentioned that Ethereum (ETH) appears to be performing well during U.S. hours, indicating “institutional flows” into the cryptocurrency, however Aptos is doing well around the clock.

“Aptos is seeing a mix of strong returns during U.S. trading hours AND during Asia trading hours.”

The report concluded by stating that this “should be a very positive sign for Bitcoin” as institutional adoption continues.

In earlier comments to Cointelegraph, economist Lyn Alden believes that Bitcoin is currently playing “a bit of catch-up,” getting back to where it would have been without the FTX collapse occurring.

Alden warned that there is “considerable danger ahead” for the second half of 2023, citing liquidity conditions being “good right now” in part because of the U.S as a major factor.

#Bitcoin is a Masterpiece. pic.twitter.com/2rhnCYlkW1

— Michael Saylor⚡️ (@saylor) January 25, 2023

Alden explained that as the U.S. Treasury is drawing down its cash balance to keep the country’s debt levels low, it pushes “liquidity into the financial system.”

Meanwhile, popular trader and market commentator TechDev posted a Twitter update on Jan. 26 showing the price correlation between Bitcoin and Gold, stating that if Bitcoin continues to follow the price of Gold, it might even “crack the $50,000 mark.”