Bitcoin OTC Reserves Surge At Record Levels Not Seen Since 2021

Over the last month, the price of Bitcoin has been subject to much turbulence, culminating in a total loss of 3.09% according to data from CoinMarketCap.

Over the last month, the price of Bitcoin (CRYPTO: BTC) has experienced minimal change, losing 3.09% in total, as reported by CoinMarketCap. Despite experiencing waves of a price rally, the crypto market leader failed to reclaim the $65,000 price zone throughout August.

However, institutional investors have taken the opportunity to strengthen their position in the Bitcoin market amid this bear market.

Bitcoin OTC Reserves Surge At Record Since 2021

In a Quicktake post on CryptoQuant, an analyst with the username caueconomy made an observation on the purchasing behavior of Bitcoin institutional investors. By monitoring transactions of Bitcoin’s over-the-counter (OTC) addresses, this analyst gathered that these parties have been rapidly increasing their holdings in the past few weeks.

These large-scale transactions are usually conducted off exchanges and credited to OTC addresses. Monitoring the net flow of Bitcoin into and out of these addresses provides insight into the purchasing and selling activities of whales and institutional investors.

As institutional investors often prefer OTC trading over exchanges for large transactions — as it allows them to buy or sell large quantities of cryptocurrencies without moving the market price significantly — caueconomy noted that these investors have now acquired 57,000 BTC, valued at $3.65 billion, in the last 30 days, which marks a purchase scale last seen in 2021.

The analyst notes that this buying activity is unusual as high levels of institutional OTC trading usually occur during periods of high volatility in contrast to the low price volatility that has been largely present in the BTC market over the last few weeks.

However, caueconomy postulates that this large-scale acquisition may be targeted at planned token offload in cases of “adverse” market reaction. In contrast, whales and institutional investors’ purchase of large amounts of an asset especially during market lows represents a bullish signal of confidence in future profitability.

Most recently, the premier cryptocurrency experienced a price boost on Friday, after US Federal Reserve Chairman Jerome Powell affirmed an incoming interest rate cuts over the next few months. Bitcoin rose by 4.84% to reach a peak of $64,879, just shy of the prominent $65,000 resistance zone.

Commenting on this development, Uto Shinohara, financial expert and managing director of an asset investment company Mesirow, predicted a rate cut of 30bps in September and a total rate cut of 95 to 100 bps by the end of 2024.

If such predictions prove true, Bitcoin and other cryptocurrencies are expected to surge in demand in the coming months which could translate into significant profits for institutional investors.

BTC Price Overview

According to data from CoinMarketCap, Bitcoin trades at $63,905 with a price gain of 5.38% in the last 24 hours. In tandem, the asset’s daily trading volume is up by 64.53% and valued at $42.94 billion.