- Institutional demand for Bitcoin could be about to bounce back after recent findings.
- Whale address analysis revealed a slowdown in selling pressure and some accumulation.
Institutional participation is undoubtedly one of Bitcoin’s biggest drivers [BTC] adoption. At least that was apparent during the 2021 bull run, with many institutions wanting a piece of the BTC pie.
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Institutional demand for Bitcoin declined during the bear market, but is gradually making a comeback. Its importance is underestimated, given that it competes with the whales in terms of liquidity.
So, is there a chance for institutional demand to make a strong comeback?
Despite the bearish market conditions, MicroStrategy is at the forefront of institutional demand for Bitcoin. Interestingly, the same company is trying to pave the way for the return of institutional liquidity in the king coin. MicroStrategy recently announced plans to issue shares worth more than $750 million.
Saylor is trying to spend $750 million in MSTR stock to buy even MORE Bitcoin?
This man is an absolute animal. pic.twitter.com/rJ0IhY92pJ
— Will Clemente (@WClementeIII) August 1, 2023
Why is MicroStrategy’s approach good for Bitcoin? Well, it turns out that the crypto investment firm plans to use the proceeds from the sale to buy into Bitcoin. In other words, the offering provides a route for buyers to gain exposure to the king coin.
Will the move lure more institutional investors back into BTC’s fold? Well, so far, the MicroStrategy stock offering represents one of the few ways institutions in the US can secure Bitcoin exposure. So it explains the pull, but doesn’t necessarily mean it will cause a surge in institutional demand.
However, it could inspire enough confidence to spark more demand for BTC. The biggest catalyst for an institutional upturn is likely to be the adoption of Bitcoin ETFs.
What is holding Bitcoin back?
The amount of Bitcoin flowing out of major wallets has been on the rise lately. Some statistics confirming this include the Purpose Bitcoin ETF holdings, which indicated that the Bitcoin collected through this ETF has returned to the market at the time of writing.
Source: Glassnode
How much are 1,10,100 BTC worth today?
Similarly, July saw a significant amount of Bitcoin outflow from US government holdings. Also worth noting is that outflows from the US government and Purpose Bitcoin ETF holdings have leveled off. In other words, Bitcoin’s selling pressure eased.
However, we have seen a slight increase in demand from whale addresses. Addresses with at least 1,000 BTC and even addresses with more than 10,000 BTC have started replenishing their balances. This suggests a higher probability of a bullish outcome.
Source: Glassnode