Bitcoin super whales who took profits in late 2020 have silently sold their Bitcoin stash to institutional investors who were waiting in the shadows to get in.
Researchers at OKEx Insights looked at data from the finance analytics platform called Catallact. They had discovered that Bitcoin went on a steep climb in the Quarter 4 of 2020 as the institutions dived into the largest cryptocurrency.
The report noted that the transactions over 1,000 BTC went from just above 5% to a high of over 45% in September 2020 and remained in the 30%-40% range.
“The conclusion we may draw from this on-chain data is that institutional investors really piled into the BTC space after Paul Tudor Jones announced his entrance – and they didn’t stop as 2020 came to a close. Additionally, we can assume that institutions were on the bidding end of the spectrum and buying large amounts of BTC – as opposed to selling – since the price of the leading cryptocurrency rose in a parabolic fashion throughout Q4 2020.”
To support their analysis, OKEx cross references the on-chain data with some big verified institutional purchases.
“For starters, we know for certain that business intelligence, mobile software and cloud-based services company MicroStrategy invested large sums of money into BTC last year. In August 2020, the firm purchased 21,000 coins for £181,996,875.00. This coincides with the increase of large transactions on the aforementioned charts.
Several more purchases from MicroStrategy took place in 2020. On Dec. 5, the company purchased 2,574 BTC for £36,399,375.00 million at an average price of £14,142.61 per coin. Later that month, on Dec. 22, it purchased another 29,646 coins for £473 million at an average price of approximately £15,961.13 each. Additionally, the Massachusetts Mutual Life Insurance Company invested £72,798,750.00 million in BTC in December – a sign that more institutional investors kept entering the market at that time.”
The report also looked into the sell-side to see exactly which entities were unloading as large institutions purchased crazy amounts of BTC. The researchers also discovered that the average amount of the BTC involved in the transactions increased in October 2020 & stayed high until the end of the year 2020, suggesting that long term holders of BTC sold into the rally.
“With the supply side of BTC failing to meet the institutional demand as the leading cryptocurrency entered price discovery, the coins being sold seemingly came from both long-term holders and Bitcoin miners. In other words, old-school Bitcoiners sold some of their old bags to new institutional buyers with extremely large new bags to fill – for better or worse.”