Institutionals are not giving up on Bitcoin, observes Chainalysis, although these investors are being cautious for now. However, some take advantage of the drop to buy.
Is a new crypto winter coming? The cryptocurrency market capitalization has lost over $ 500 billion. Qualifiers abound in recent days.
The “bloodbath” affects both Bitcoin and Altcoins. Between May 12 and 19, the price of BTC plunged from $ 58,000 to $ 36,000. Overall, cryptocurrency prices fell more than 30% over the period, Chainalysis measures.
The end of the bull run? No, for Philip Gradwell
Such corrections are rare in the young history of crypto. Chief economist Philip Gradwell recalls that Bitcoin has only experienced such declines on four occasions. And three of them refer to the previous crypto winter.
The concern is therefore strong. Are Bitcoin and Other Cryptocurrencies Entering a New Era of Degrowth? Not necessarily. Gradwell points out in particular that the prices of BTC and ETH remain historically high.
“So is this the end of the bull market? Is Crypto Winter Coming? I don't know, but my inclination is to say no. There are many differences between today and the major price cuts of March 2020 and December 2017, "said the expert from Chainalysis.
Like Glassnode, he distinguishes in particular two categories of investors with distinct behavior. Retail, individuals, thus tends to sell on exchanges. This is not the case with institutional investors.
Institutionals play it safe
However, the latter are cautious and " just don't buy as much as they used to ". However, some are starting to see falling prices as an opportunity to buy and accumulate crypto again.
The May transactions of a BTC whale reflect this potential trend perfectly. On May 9, she was selling 3,000 bitcoins for an average price of $ 58.5K. However, on May 15, 18 and 19, after major drops in prices, she made three purchases for a total of 3,521 BTC.
“Nor does it appear that institutions are major sellers, although they may be more cautious as buyers at this time (…) This suggests that a large part of the selling is done by people with assets already on the exchanges, which tend to be retail investors, ”explains Philip Gradwell.