Despite Bitcoin’s price hovering around multimonth lows, institutional investors are seizing the opportunity to increase their holdings, according to a recent analysis. Data from CryptoQuant reveals that institutional investors added 100,000 BTC, equivalent to $5.7 billion, in just one week.
Significant Accumulation Amid Price Drop
The latest Quicktake blog post from CryptoQuant highlights that entities holding between 1,000 and 10,000 BTC have ramped up their Bitcoin exposure since the beginning of June. During this period, BTC/USD has seen a decline of up to 23%. Despite this, institutional players have not only continued to buy but have done so with increased conviction compared to when Bitcoin was near its all-time highs.
March vs. July: A Shift in Buying Patterns
CryptoQuant contributor Cauê Oliveira notes that the current buying trend is reminiscent of the significant inflows seen during the U.S.-based spot Bitcoin exchange-traded funds (ETFs) boom in March. However, unlike March, when the demand was more linked to fundraising, the recent accumulation suggests a genuine “buying the dip” strategy among large players.
Bitcoin large holder balance data (screenshot). Source: CryptoQuant
While March saw daily inflows topping $1 billion, current day-to-day figures are lower, with around $79 million on July 11 and $294 million on July 8, the highest in a month.
Conviction Amid Market Fear
The increase in institutional holdings contrasts sharply with the behavior of novice investors, many of whom capitulated last week, particularly those who had purchased Bitcoin between one and three months ago.
US spot Bitcoin ETF netflows (screenshot). Source: Farside Investors
As reported, short-term holders, including new whales, are currently dealing with 17% unrealized losses, with their aggregate cost basis sitting above $64,000. This has left the overall crypto market sentiment in a state of “extreme fear,” according to the Crypto Fear & Greed Index, which dropped to its lowest level since January.
Conclusion
While the Bitcoin market faces significant volatility and fear, institutional investors are taking a long-term view, increasing their holdings and showing confidence in the cryptocurrency’s future potential. This trend suggests that despite short-term price declines, institutional belief in Bitcoin’s value proposition remains strong.
