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Bitcoin hits $64,000, is it due to institutional frenzy?

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Despite the incredible volatility in Bitcoin prices, current data suggests that retail investors remain calm, indicating that institutional investors may dominate this phase.

Original Title: "Bitcoin Touches $64,000, Retail Investors 'Sleeping', Institutions Celebrating"

Original Author: Mary Liu, Bitpush

According to terminal data, Bitcoin surged rapidly earlier on Wednesday, breaking through the $60,000 mark for the first time since November 2021, and then hitting a high of $64,037 within a few hours before suddenly dropping 7%, hitting a low of $59,400. Mainstream tokens such as SOL from Solana, LINK from Chainlink, and AVAX from Avalanche also fell by nearly 3%-5% in the past hour.

CoinGlass data shows that the market's violent fluctuations have led to a total liquidation of over $600 million in the cryptocurrency market. In the past 24 hours, 178,095 traders have been closed out, with a total amount of $693.29 million.

Analysts pointed out that the participation of retail investors was relatively low during this round of price increases.

Due to high traffic, Coinbase's application was down for a period of time, and some users reported that their account balances were showing as zero. The company's CEO, Brian Armstrong, explained on social media that "we modeled for a 10x traffic increase and did load testing, but it exceeded that in reality."

Even with the appearance of callbacks, Bitcoin's weekly increase still exceeds 7%, and its monthly increase is 44%. Analysts attribute this growth to several favorable factors: increased demand for Bitcoin ETFs, expectations surrounding the next Bitcoin halving cycle, and positive macroeconomic conditions.

The trading of Bitcoin ETF in the spot market in the United States continues to be in full swing.

According to Bloomberg's data, as of the close of trading on Wednesday, the trading volume of the spot Bitcoin ETF reached $7.6 billion, breaking the historical record of $4.7 billion since the first trading day on January 11th.

BlackRock's Bitcoin ETF (IBIT) has a trading volume of approximately $3.3 billion. Fidelity's FBTC has a trading volume of approximately $1.4 billion. Grayscale's GBTC has a trading volume of $1.8 billion.

Bloomberg's senior ETF analyst Eric Balchunas said that IBIT "today's trading volume is more than the sum of the trading volume of the past two weeks, which has officially become a trend."

Bianco Research President and Macro Strategist Jim Bianco stated that the independent trading volume of the BlackRock Bitcoin ETF surpassed that of the top SPY ETF of the S&P 500 and the QQQ tracking the Nasdaq.

According to data from BitMEX Research, since their launch in January, 10 newly listed spot ETFs have attracted over $6.7 billion in net inflows. This week, spot ETFs accelerated their fundraising efforts, attracting over $1 billion in just two days. BlackRock's IBIT alone attracted $520 million in new funds on Tuesday.

Individual Investors "Sleeping", Institutions Celebrating?

IntoTheBlock analysts have stated that according to on-chain data and network searches, retail investors have had a relatively low level of participation during Bitcoin's rise to over $60,000 USD.

Google's search results and application download volume for Bitcoin are average. It is worth noting that the application of the cryptocurrency exchange Coinbase rose to first place in the download volume of the Apple US App Store in late October 2021, coinciding with the enthusiasm of the bull market.

The analyst added that the transaction volume on the Bitcoin blockchain has been increasing, but it is far below the levels seen during the market peak in 2021.

Similarly, the number of new Bitcoin addresses is also stable, and has cooled down since the peak at the end of last year, which may be due to the frenzy of Ordinals. The Ordinals protocol allows users to store non-fungible token (NFT) inscriptions on Bitcoin. The popularity of this protocol surged last year, causing network congestion and driving up transaction fees.

IntoTheBlock analyst stated in a post on X on Wednesday that "although the price trend of Bitcoin is incredible, current data shows that retail investors are calm, indicating that institutional investors may dominate this stage. ETFs are seen as potential accumulation tools."

Stephane Ouellette, CEO of FRNT Financial, an institutional platform focused on digital assets, said: "This rebound seems to be mainly driven by the BTC ETF. Some estimates indicate that less than 20% of investment advisors have received approval from their companies to include their clients in the product, and this process may be completed within a year."

CoinDesk reported today, citing sources familiar with the matter, that Wall Street giant Morgan Stanley is considering adding a spot Bitcoin ETF to its brokerage platform.