institutionalinvestors

Low-Risk Appetite Continues to Play Out in Bitcoin Market Based on Diminishing Institutional Activity

Institutional activity remains sluggish as bitcoin hovers around the lower $20K level, depicting a low-risk appetite.

On-chain analyst Caue Oliveira pointed out:

“Low institutional activity evidences de-risking movement by traditional whales. Looking at the daily trading volume in mutual funds traded in the traditional market with direct/indirect exposure to BTC, we can see the current low-risk appetite.”

Source:CryptoQuant/CaueOliveira

Institutional investment has played an instrumental role in enabling Bitcoin to hit all-time highs (ATHs). For instance, BTC breached the then-historic highs of $20K in December 2020 after failing to do so for three years as more institutional investors joined the network.

Furthermore, institutional investments enabled the leading cryptocurrency to record the latest ATH of $69,000 in November last year.

Nevertheless, retail investors continue jumping on the Bitcoin bandwagon based on the rise of non-zero BTC addresses. Market insight provider Glassnode stated:

“The number of BTC addresses holding 0.01+ Coins just reached an ATH of 10,560,930. Previous ATH of 10,560,117 was observed on 26 July 2022.”

Source:Glassnode

Despite the back and forth being experienced in the BTC market, long-term objectives continue to take shape.

Through its weekly report dubbed “Conviction Through Confluence,” Glassnode highlighted:

“Long-term supply dynamics continue to improve, as redistribution takes place, gradually moving coins towards the hodlers. Notable supply concentrations are observable at $20K, $30K, and $40K, which tend to align with both technical and on-chain price models, making these regions significant zones of interest.”

Bitcoin was hovering around $21,392 during intraday trading, according to CoinMarketCap. With the looming interest rate review by the Federal Reserve (Fed) slated for July 27, it remains to be seen how the top cryptocurrency plays out in the short term.

Appetite for Crypto Amongst Institutional Buyers in Hong Kong is Low: New Report

The months-long headwinds in the cryptocurrency ecosystem are beginning to fuel disinterest amongst institutional investors in Hong Kong.

According to a report from the South China Morning Post (SCMP), riding on an earlier report from Bitstamp which surveyed 253 Hong Kong institutional investors, as many as 9% said they will reduce their exposure to the nascent asset class or stop investing in it altogether.

This figure is significant because it is far above the 3% who held a similar view in the previous quarter.

“It is true that retail investors and the institutions who serve them are less active in crypto and perhaps looking for other assets in the short term,” said James Quinn, managing partner of Hong Kong-headquartered Q9 Capital, a crypto investment platform for institutions and high-net-worth individuals. Quinn added that “the ‘easy money’ is not so easy at the moment.”

It has been a roller coaster ride for the broader cryptocurrency ecosystem since the invasion of Ukraine by Russian troops.

The global economy was turned into chaos and this was further compounded by the collapse of Terra LUNA which lead to the bankruptcies of a number of established crypto firms beginning with Three Arrows Capital and later, Voyager Digital and Celsius Network amongst others.

While the survey still showcases a waning interest amongst investors, a good number of corporate buyers are still committed to investing in the industry. The Bitstamp survey showed that 29% of those surveyed still plan to commit additional funds to digital currencies.

The few institutional investors who still have an interest in injecting capital into the space will do so provided the funds are targeted at highly innovative protocols in the Web3.0 space. This model has guided the majority of new capital being injected into the broader cryptocurrency world today.

“The interest level remains high in further building the ecosystem, especially as it relates to proper investment products and solutions,” Quinn said. “[Institutions] are not changing course.”

SEBA Bank Floats Ethereum Staking Service for Institutional Investors

Swiss-based digital bank SEBA has announced the launch of its Ethereum staking service, tailored to fit the needs of institutional investors.

The staking service, according to the bank was in response to the demand from its clients, as many aims to gain exposure to the Ethereum protocol, especially now that it is making a transition into the Proof-of-Stake (PoS) consensus model.

SEBA said the staking service will be highly regulated and will come with a trusted custody service. The staking service will general rewards that can be paid put on a weekly basis, offering a new layer of flexibility, access, and comfort for investors who pitch tents with it.

“The Ethereum merge is an anticipated and significant milestone for the world’s second-largest cryptocurrency, delivering improvements for its users across the areas of security, scalability, and sustainability,” said Mathias Schütz, Head of Technology and Client Solutions at SEBA Bank.

According to Mathias, “the launch of our Ethereum staking services will enable institutional investors to play a key role in securing the future of the network, via a trusted, secure and fully regulated counterparty. Our institutional grade staking services offer a comprehensive and fully integrated platform for earning rewards from investments across a range of leading PoS crypto networks. By launching support for Ethereum staking we continue to deliver our clients the cutting-edge technology that they need to stay apace with the rapidly evolving digital assets industry.”

Over the years, Bitcoin has gained increasingly massive traction amongst institutional investors as an investment asset and a viable hedge against inflation. With Ethereum switching from the Proof-of-Work (PoW) network, investors may start prioritizing it in the near future as a worthy substitute for Bitcoin.

In anticipation of the PoS version of Ethereum through The Merge event, a number of mainstream players in the cryptocurrency sector have pledged support for the new chain with outfits like Coinbase promising staking services will be activated.