Bitcoin and Ethereum Surge as Institutions Allegedly Purchase the Dip
Crypto markets saw a surge in activity on Wednesday as investors took advantage of discounted digital assets. Ethereum (ETH) experienced a 1% increase to reach $2,500, while Bitcoin (BTC) climbed 2% to hit $56,822. Polkadot (DOT) also saw a rise of 3%, and Solana stood out with an impressive 11% gain for the day.
According to on-chain analyst Lookonchain, institutional investors seized the opportunity presented by lower prices. Cumberland, a crypto trading firm, received $95 million in USDT from the Tether Treasury and transferred it to platforms like Coinbase, Kraken, OKX, and Forwarder. Since October 20, 2023, Cumberland has injected a total of $6.28 billion worth of USDT into the market.
“Institutions have started injecting funds into the crypto market and buying the dip!” tweeted Lookonchain.
Data from CryptoQuant revealed that over the past 30 days, more than 400,000 Bitcoins valued at $23 billion have been moved to permanent holder addresses. These addresses, as per CryptoQuant, belong to entities that accumulate Bitcoin over time without selling.
CryptoQuant CEO Ki Young Ju shared his perspective on the matter, suggesting that various entities, including traditional financial institutions, companies, and governments, will announce their Bitcoin acquisitions in Q3 2024. He also hinted that retail investors might regret not capitalizing on the opportunity due to concerns like the German government selling Bitcoin.
Santiment, an on-chain analytics firm, highlighted the significant role social media played in Bitcoin’s swift recovery to $57,000 amid speculations of a potential drop to $45,000 or lower.
On the same day, Solana (SOL) surged by 11% to $153, leading to a new all-time high in the SOL/ETH ratio. The ratio hit 0.060, indicating that 1 SOL is now equivalent to 0.06 ETH. Previously, the SOL/ETH ratio reached a high of 0.058 in November 2021.
Despite a challenging week for risk-on assets, spot Ethereum ETFs managed to attract positive inflows. On Monday, ETH ETFs saw $48.8 million in net inflows, followed by $98.4 million on Tuesday. Notably, BlackRock’s ETHA and Fidelity’s FETH were the main contributors to these inflows, as reported by Farside Investors Data. Conversely, Grayscale’s ETHE ETF experienced outflows totaling $85 million during the week.
In the traditional markets, U.S. stock futures showed positive movements on Wednesday. S&P 500 futures rose by 1%, Nasdaq 100 futures increased by 2%, and Dow Jones Industrial Average futures climbed by 0.7%. In a speech on Wednesday, Bank of Japan’s deputy governor Uchida Shinichi reassured that the central bank would not raise rates amidst market volatility. Japanese markets witnessed significant fluctuations this week, ranging from the worst crash since Black Monday in 1987 to the best day since October 2008.
