Are Institutions Already Over The Bitcoin Digital Gold Narrative?

Reynaldo Marquez

Last Updated: June 11, 2024 1:56 pm

3 mins read

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Bitcoin trades at $36,786 and records profits in the 7-day chart, after two consecutive weeks of losses. In the 30-day chart, BTC still has a 32.3% loss. The price action painfully moves higher in the current range, but without conviction from the bulls.

The crypto market seems to be stagnated after BTC’s price crash. The battle has been fought by short-term holders selling their coins to long-term holders, but institutions have been mostly absent during the correction.

Data from CryptoQuant suggest institutional demand for the Grayscale Bitcoin Trust (GBTC) and the Bitcoin Fund launch in Canada by investment fund manager 3iQ is decreasing.

As seen below, the GBTC has seen a negative premium and has been trading at a discount since March 2021. This caused discomfort and concern from their clients and Grayscale’s parent company, Digital Currency Group, was forced to intervene. The company had to buy several million in GBTC shares.

Unlike the Canadian QBTC, the GBTC has been holding its Bitcoin. The QBTC reduced its holdings to 7,980 BTC at the beginning of June. Thus, creating selling pressure in the crypto market, as seen below.

The general sentiment in the market has been negative, despite the news of the adoption by nation-states. At the start of the current week, BTC’s price saw some positive development. This coincides with a decrease in GBTC discount from 12% to 7%.

As Lex Moskovski, CIO at Moskvski Capital, shown in the last 2 days, the number of addresses accumulating BTC saw a leg up after a period of consolidation. However, the selling pressure has not decreased, as the increase in BTC inflows to exchanges suggests.

Will Bitcoin Bulls Managed To Push The Bears Back?

At the moment, Bitcoin’s price could still be dominated by uncertainty and no clear direction. As a report by QCP Capital states the BTC sell-off has been “deeper and sharper” than expected.

The sell-off has come in 3 waves since the beginning of May. The market could see another sell-off, but in the form of consolidation as the firm claims:

it looks like BTC is setting a bottom for the Wave 4 rally higher. This Wave 4 however will most likely be a slow steady consolidation grind.

Bitcoin has two challenges in the short term, it must flip $38,000 from resistance to support and must overcome the “formidable” wall at $40,000. Bitcoin thesis as a store of value seems to be invalidated in the short term, as the low institutional participation suggests. Therefore, there is less demand for the cryptocurrency.

(…) all three of the bull cases for BTC have been invalidated, and it’s hard to make a bullish fundamental argument to buy BTC right now. we continue to expect the downtrend to persist and for the market to be on sell rallies mode in the near-term at least, and if Wave 4 does extend past $40k we expect the $50k to have even larger selling supply.

QCP Capital expects the Consumer Price Index (CPI) print and the Federal Open Market Committee (FOMC) meeting to be risk factors for BTC’s price in the short term.

it was the CPI print last month, coupled with a confluence of some other factors, that started the big BTC decoupling.

The firm sees potential for the price to drop below $30,000 and expects $20,000 to be strong support if this scenario materializes.

11/ BTC price looks likely to remain capped till year end. Market seems to have settled somewhere in between downside fear and a wait and see approach. Retail volumes have thinned out and movements from whales are dominating the price action

— QCP (@QCPgroup) June 9, 2021

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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