2024

Bitcoin

<p>Bitcoin, after experiencing a stellar start to the year, is now going through a phase of turbulence. The demand for the world’s first cryptocurrency has dropped significantly since April, a phenomenon exacerbated by a slowdown in institutional purchases, notably exchange-traded funds (ETFs).</p>
<h2 id="h-the-slowdown-in-institutional-purchases">The slowdown in institutional purchases</h2>
<p>Since April, the demand for Bitcoin has seen a marked decrease. Acquisitions of <a href="https://www.cointribune.com/en/crypto-a-spot-etf-could-multiply-the-price-of-solana-by-9/" target="_blank" rel="noopener noreferrer nofollow">spot ETFs,</a> once a key driver of demand, have significantly slowed down.</p>
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<p>In March, these purchases reached around 12,000 BTC, but this average fell to just 1,300 BTC per week in August. This drop reflects a loss of interest from institutional investors, often considered the pillars of the market.</p>
<p>This slowdown is accompanied by a decrease in the price premium for Bitcoin trading on Coinbase, a crucial indicator of institutional demand.</p>
<p>After reaching a premium of 0.25% at the beginning of the year, it has dropped to 0.01%, signaling growing disinterest.&nbsp;</p>
<p>This situation highlights the importance of spot ETFs in maintaining the demand and price of Bitcoin. Without renewed interest from institutions, Bitcoin could continue to stagnate or even decline.</p>
<h2 id="h-long-term-bitcoin-holders-vs-short-term-holders">Long-term Bitcoin holders vs. short-term holders</h2>
<p>While institutional purchases are weakening, long-term holders continue to accumulate bitcoins at record rates.&nbsp;</p>
<p>The total balance of addresses that have never spent or sold bitcoin increases significantly each month, reaching unprecedented levels. These “hodlers” seem unperturbed by the current market volatility, betting on a future rise in Bitcoin.</p>
<p>In contrast, short-term holders, who bought bitcoin during the 2024 rally, are suffering heavy unrealized losses.</p>
<p>After acquiring bitcoins at record prices in March, many of them now see the value of their assets diminish as Bitcoin’s price hovers around $58,800. This situation has led to an “overreaction” among some of these investors, causing a massive sell-off and contributing to the recent price drop.</p>
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<p>Despite these challenges, analysts believe that the market may have already overcome the worst.&nbsp;</p>
<p>The report from <a href="https://glassnode.com/" target="_blank" rel="noopener noreferrer nofollow">Glassnode</a> highlights that if the market value to realized value (MVRV) ratio of short-term holders remains below 1.0 for an extended period, it could trigger panic.</p>
<p>However, the absence of a significant gap between the cost basis of holding and the cost basis of spending suggests that the recent drop could be a passing reaction.</p>
<p>While some long-term holders continue to bet on a recovery, short-term holders and miners face increasing pressure. The road ahead for Bitcoin seems fraught with obstacles, but the historical <a href="https://www.cointribune.com/en/90-of-bitcoins-in-profit-surprising-resilience/" target="_blank" rel="noopener noreferrer nofollow">resilience</a> of the crypto could still surprise.</p>

Bitcoin Down: Institutional Purchases Weaken!

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