Large Bitcoin trading volume continues to grow, regulation has not deterred institutional investors

Glassnode’s recent blockchain data shows that the increasingly stringent scrutiny of the crypto market by lawmakers and regulators, including debates surrounding the crypto tax reporting provisions of the U.S. Infrastructure Act, may scare retail investors, but not institutions. investor.

The Berlin-based blockchain data company found that large investors represented by large dollar transactions have pushed the price of Bitcoin up by nearly 20% since last week. Analysts said that this trend shows that institutional investors pay more attention to the advantages of cryptocurrencies rather than potential obstacles.

Joel Kruger, a cryptocurrency strategist at the institutional cryptocurrency exchange LMAX Digital, said: “Investors focus on the positive factors surrounding regulation, not the negative ones.”

Since the beginning of August, the value of Bitcoin on-chain transactions worth at least $1 million has increased by 10%, accounting for nearly 70% of the total value transferred.

Large Bitcoin trading volume continues to grow, regulation has not deterred institutional investors

At the same time, the percentage of small-scale transactions in the overall market has declined, as shown in the chart below. Since July 2020, transactions worth less than US$1 million have fallen from 70% of market dominance to approximately 30-40%.

Large Bitcoin trading volume continues to grow, regulation has not deterred institutional investors

The recent optimism of institutional investors comes at a time of fierce regulatory developments in the global crypto market, including the US$28 billion tax reporting clause in the US$1 trillion infrastructure bill, and Europe and other regions that are making the most of the world’s largest crypto trading volume. The exchange Binance cracked down.

Analysts and industry experts said that although it is possible to strengthen regulation, institutional investors are optimistic about the future of Bitcoin.

Andrew Tu, an executive at quantitative trading company Efficient Frontier, said: “In general, institutions will welcome clear and fair regulation. The price increase in the last week…shows that the market has not responded strongly to regulatory concerns.”

Large Bitcoin trading volume continues to grow, regulation has not deterred institutional investors

Glassnode’s data shows that according to the median of 14 days, the average number of days for each Bitcoin transaction has remained unchanged, from 7 days to about 10 days, which means that some Bitcoin “veterans did not choose to withdraw from the flow at this stage.” sex”.

Institutional investors did not pay attention to regulatory uncertainty, but emphasized the strong fundamentals of the Bitcoin market as a reason for their optimism.

Noelle Acheson, head of Genesis Market Insights, said: “The impact of regulatory issues on Bitcoin is not as great as other cryptocurrencies, and the sentiment behind Bitcoin has been showing signs of change for several weeks.”

On the supply side, the illiquid supply of Bitcoin, that is, the balance held by illiquid entities, has recently hit a record high, which means that Bitcoin is weak in supply.

Large Bitcoin trading volume continues to grow, regulation has not deterred institutional investors

The financing interest rate in the perpetual derivatives market turned positive again after being negative for most of June and July.

The financing rate refers to the cost of holding long/short positions in the Bitcoin perpetual contract (futures without expiration) market. Exchanges that provide perpetual contracts use this indicator to balance the market and guide the price of perpetual contracts to approach the spot price.

Large Bitcoin trading volume continues to grow, regulation has not deterred institutional investors

A positive financing rate means that the longs are buying shorts to maintain their positions, and the market is biased to be bullish. At the same time, negative financing rates mean bearish.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/large-bitcoin-trading-volume-continues-to-grow-regulation-has-not-deterred-institutional-investors/
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