Bitcoin has managed to go from under $ 30K to over $ 45K and as a king coin Inches closer to its ATH, bullishness was the tune of the hour. Amid the general price gains from portfolio expansion and iInvestors went all into that Trading, Bitcoin lost momentum. BTC’s upward momentum stalled when Bitcoin closed below $ 44,000 on August 12.

Institutional interest low?

It is not unknown that the institutional interest in BTC acts as a major catalyst for price. One metric that measures institutional interest in the coin is Grayscale Premium, which tracks capital flows into the Grayscale Bitcoin Trust (GBTC). Oddly, however, the grayscale premium hit lows as Bitcoin prices continued to rise. While the premium has fluctuated in negative territory since March, its values ​​continued to depreciate at the time of writing.

Source: Skew

A higher grayscale premium highlights a higher bitcoin inflow into the Grayscale Bitcoin Trust, which causes GBTC to trade at a premium in relation to the BTC spot price. Conversely, a lower premium means a decreasing BTC inflow, which causes GBTC to trade at a discount to the Bitcoin spot price. In hindsight, it’s noteworthy that the average premium at the time of writing was 3.83% while the latest reading is -12.8%, which was too low given the price of BTC.

BTC owned by equity interests

With the grayscale premium falling, it’s interesting to take a look at stock-owned BTC. Recently, Bitcoin analyst Willy Woo highlighted that 0.9% of the supply is in corporate treasuries and 3.7% in ETFs. Here, “participation” is what is “generally available” to the public, that is, grayscale and publicly traded companies and ETFs.

Source: Willy Woo Twitter

Woo further emphasized: “It is now carrying a blocked oversupply from the lucrative arbitrage trading. Because of this oversupply, it is slowly bleeding out and the fees are on fire. ‘ He also said:

“Grayscale trust remains the big outlier. Note that their stocks decrease due to their 2% management fees that weigh on the balance. To put that in perspective, while Square has amassed 8,027 BTC since October. Grayscale deducted more than that in fees. “

These bullish signs cannot be ignored

While the GBTC premium acts as a catalyst for price growth, it’s not the only metric that dictates the price of Bitcoin. In connection with this, it was also noteworthy that Bitcoin continued to flow from the exchanges at a rate between 75,000 and 100,000 per month in August. Analytics site, Glassnode pointed out that this magnitude of outflows resembles the period between 2020 and the first quarter of 2021, when heavy accumulation and GBTC arbitrage trading dominated.

Source: Glassnode

It is important to note a higher GBTC premium for an ideal rally. However, Bitcoin’s network growth was growing faster than ever, with 1.2 million users added in the last 30 days alone, indicating the network was growing steadily despite falling prices.


Please enter your comment!
Please enter your name here