Bitcoin: Institutional investors find new opportunity in BTC accumulation

• Bitcoin trust premiums start to rise indicating institutional interest.
• Miner revenues continue to fall, which could lead to potential selling pressure.

At the time of writing, Bitcoin[BTC]’s price had been consistently hovering around the $30,000 mark. However, the recent interest displayed by institutions in BTC may potentially exert a positive influence on its price trajectory.

Institutions show interest in BTC

According to recent data by Woominkyu from CryptoQuant, institutional investors’ optimism was evident from the rising premium of Bitcoin trusts. The premium represents the difference between the market price of the trust and its Net Asset Value (NAV), indicating the demand for the fund.

For context, a Bitcoin trust is a financial product or investment vehicle that allows investors to gain exposure to Bitcoin’s price movements without directly owning the cryptocurrency

From January 2023 until the time of writing, the premium of the Bitcoin trust consistently grew, signifying growing investor eagerness to purchase the fund, which in turn reflects a positive outlook on Bitcoin. As the premium rose, the gap between the trust’s market price and the actual market price of Bitcoin narrowed down, further indicating the increasing positivity among investors towards Bitcoin.

Source: Crypto Quant

Growing faith in BTC was also evident through the rising number of long-term holders of the king coin. According to data from glassnode, a substantial 55% of Bitcoin’s total supply has remained unmoved for at least two years.

Source: glassnode

Additionally, after observing the realized PnL of BTC holders, it was seen that Bitcoin was no longer under a period of capitulation. This indicated that the market sentiment and behavior towards Bitcoin had shifted from extreme fear and panic selling to a more stable and balanced state.

Capitulation is a term used to describe a situation where investors give up hope and sell their assets in a panic, causing a sharp decline in prices. The absence of capitulation suggests a potential improvement in investor confidence and a possible turnaround in Bitcoin’s price trend.

Multi-year view:

Bitcoin is no longer in a period of capitulation pic.twitter.com/G6drpcZ6BQ

— Will Clemente (@WClementeIII) July 19, 2023

Miners will need to see green

However, there may be some selling pressure from miners that could drive down BTC’s price in the future. Recent data indicated that the revenue generated by miners declined materially over the last few days. If this trend continues, miners may be forced to sell their holdings to remain profitable.

Source: Blockchain.com

At press time, Bitcoin was trading at $30,200. Over the last week, the number of addresses holding BTC had grown. However, the velocity of BTC had declined. This implied that the frequency with which BTC was being traded had fallen.

Source: Santiment