Institutional demand for cryptocurrency appears to be slowing, according to a report by analytics company Glassnode that looks to the Grayscale Bitcoin Trust’s share price as evidence.
Fast facts:
- The Grayscale Bitcoin Trust allows trading of shares in trusts holding Bitcoin, but the fact that shares of the company are trading at a persistent discount to the net asset value of BTC, it may be the case that institutional investors are losing interest in the world’s biggest cryptocurrency, the report suggests.
- The report shows that the total holdings of two of Canada’s BTC exchange-traded funds — Purpose and 3iQ — decreased overall by 8,037 BTC over the past month.
- Additionally, according to Bybt.com, at press time, the BTC long-short ratio, which refers to the comparison between active buying and selling volume, was at 0.75, indicating poor investor sentiment.
- At the same time, research institute Capgemini’s recent 2021 World Wealth Report suggested the continued outlook for cryptocurrency remained more positive. It said: “In efforts to meet clients’ evolving needs, non-traditional products merit exploration … it is time for wealth management firms to be prepared with offerings for emerging asset classes such as cryptocurrencies.”
- This suggests opinion on crypto remains split, which is what a survey by JPMorgan found. Bitcoin.com covered the details of the report, which found that 49% of some 3,000 investors surveyed said cryptocurrency was either a “temporary fad” or “rat poison squared” — the term Berkshire Hathaway CEO Warren Buffet used to describe crypto in 2018.
- Opinion was roughly split between positive and negative in the survey, where 42% of respondents thought crypto was “here to stay” and 9% thought it would “become an important asset.”