Bitcoin Tumbles Amid Mixed Crypto Messages From India, Institutional Profit-Taking

Bitcoin and its peers surged to new record highs over the weekend on what Mike Novogratz believes was a wave of retail excitement after the stimmies (which fits with Mizuho's estimates that around 10% of U.S. stimulus checks may be used to buy Bitcoin and stocks, equating to around $40b in total)...

But, broad crypto markets took a hit this morning and initial headlines pinned the blame on India crypto regulations (which as we will see below were mixed at worst), but as CoinDesk notes, the catalysts would well be weaker buying pressure from institutional investors.

“The failure to establish a foothold above $60,000 and the decline is likely the result of the flat-to-negative Coinbase premium – a major bellwether for institutional demand,” according to Ki Young Ju, CEO of blockchain analytics firm CryptoQuant.

Specifically, CryptoQuant’s Coinbase premium indicator measures the spread between Coinbase’s BTC/USD pair and Binance’s BTC/USDT pair. A positive spread implies increased demand from high-net-worth investors and institutions, as these entities prefer to trade via regulated exchanges with over-the-counter desks such as Coinbase.

The premium was negative over the weekend when bitcoin broke above $60,000 and remains marginally positive at press time, implying weak institutional demand. 

(Click on image to enlarge)

Having tagged almost $62 over the weekend, BTC has tumbled overnight since futures opened, erasing the weekend's gains...

(Click on image to enlarge)

Source: Bloomberg

“I think [we’ll see bitcoin] short-term bearish or going sideways until there’s significant institutional spot inflows in Coinbase,” Ki said.

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