According to on-chain data, large institutional investors are still engaged in the Bitcoin market through over-the-counter (OTC) trading. As one analyst pointed out in a CryptoQuant post, institutional investors seem to be involved in the BTC market behind the scenes.
The “tokens transferred” indicator measures the total number of coins exchanged on the Bitcoin network. The “fund flow ratio” indicates how many of the tokens being traded are moving into or out of exchanges. Its value is determined by dividing the total number of transactions involving exchanges by the total number of tokens transferred.
Significant values of the fund flow ratio often suggest that large institutional investors have finally sold or purchased.
However, the measure has been declining since the middle of last year.
Bitcoin fund flow ratio saw a significant fall last year before beginning to trend sideways around October. However, the statistic has recently seen some negative trends. This suggests that whales and institutional investors haven’t been frequent users of exchanges recently.
While the ratio has stayed at these low levels, the tokens transferred indication has seen multiple large increases throughout the course of the time. Recently, the indicator seems to have caught an upswing as well.
Such high valuations indicate that institutions are still active in the Bitcoin market; they have just moved their currencies away from controlled exchanges. Over-the-counter transactions are one way to trade outside of exchanges. Newer investment instruments, such as ETFs, would also be responsible for part of the institutional migration.
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