Bitcoin’s Institutional Era is Here
Institutions and now even US states get crypto exposure through Bitcoin ETFs
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Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Bitcoin fees dropped to their lowest in three months, retracing most of the surge from the launch of Runes
- Fees on Ethereum declined slightly as on-chain activity on Mainnet remains relatively slow
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
- Bitcoin recorded a net outflow of $290M from CEXs, following inflows of over $1B last week
- $180M worth of ETH was deposited into CEXs on net this week
Bitcoin’s Institutional Era is Here
For years, the crypto industry has been rallying around the message of “institutions are coming”. Following the launch of the spot BTC ETFs on the New York stock exchange, it is quite evident that institutions have arrived. Moreover, this week we got some clarity into the institutions buying Bitcoin as capital allocators revealed their quarterly asset reports.
Institutional Accumulation — The amount of Bitcoin held by addresses with over 1k BTC (“whales”) has increased by 250k BTC since the launch of the ETFs
- The aggregate amount of Bitcoin held by whale addresses in aggregate is now back near the levels it was prior to the FTX collapse
- However, the type of entities within this category has changed drastically:
- Previous industry giants like Genesis, FTX and 3AC got wiped out during the 2022 bear market
- Now traditional finance entities have stepped in and accumulated sizable amounts of Bitcoin since then
- Many anticipated hedge funds would buy Bitcoin ETFs, and this week it was revealed that was indeed the case, with institutions like Millenium management buying as much as $2B
- What was perhaps less expected was pensions already buying the ETF within just one quarter of launching; the state of Wisconsin has taken the lead here, buying over $160M in the Bitcoin
The influx of new capital into U.S. bitcoin ETFs has decreased — Despite a strong Q1, inflows into ETFs have slowed down in the last few weeks
- In January, the introduction of Bitcoin ETFs in the U.S. provided a substantial boost to the crypto markets, contributing to BTC reaching a new all-time high.
- Six new products holding BTC and ETH were launched in Hong Kong, but their impact was notably less pronounced.
- To put it in perspective, on their first day, these ETFs collectively recorded approximately $12.7 million in trade volume. In contrast, the U.S. ETFs achieved around $4.6 billion on their debut day.
New BTC entrants metric stalls — The weekly amount of new addresses holding BTC overall has decreased again this week. Recording a multiyear low at $283K new addresses. These values were not seen since early ’18. This contrasts strongly with the early interest from institutions in Bitcoin ETFs. While institutions have been buying, retail seems to be dormant on BTC.
Exploring Institutional DeFi: Supervised Loans
In our latest content series, we are diving into one of our key focus areas; Institutional DeFi. The latest article focuses on supervised loans. Are you curious about what this is and how it works? Read our latest article below.
