The majority of Bitcoin’s trading activity is made up of transactions above $100,000. Since 2020, institutional trade worth billions of dollars has dominated the token’s liquidity. Therefore, according to a study, large institutions seem to be accumulating bitcoin at the time of correction. Despite the market’s extreme volatility in 2022, institutional enthusiasm in bitcoin shows no signs of dwindling.
Large institutions accumulating bitcoin
Large transactions, or trades worth more than $100,000, have regularly accounted for more than 90% of Bitcoin trading volumes since 2020, according to a recent analysis. Bitcoin’s increasing institutional demand is the main driver behind the trend. The demand comes from new entrants to the market as well as current participants. In 2020, numerous big trading houses and hedge funds acknowledged Bitcoin’s validity as a store of wealth. The acceptance of bitcoin by big houses made 2020 a watershed year for cryptocurrency. In 2020, companies like Tesla, Block, and Paypal began investing in Bitcoin.
As a result, the average order size for Bitcoin has increased dramatically. According to statistics, the average Bitcoin transaction has been over $500,000 since August 2021. It also peaked in November at $1.2 million, when the cryptocurrency hit a new high.
Bitcoin continues to attract the large institutions
Despite the market’s extreme volatility in 2022, institutional enthusiasm in the token shows no signs of dwindling. Crypto markets have seen institutional capital inflows for seven weeks in a row this year. Bain Capital has raised $560 million for a crypto fund, while Pantera Capital has secured over $1 billion in pledges for a blockchain fund.
As a result of the trend, Bitcoin as well as the crypto market have begun to trade more like traditional stocks. Bitcoin, for example, is down approximately 15% this year, about in pace with drops in the NASDAQ and S&P 500 indices. The current volatility in the crypto market has been attributed to institutional panic trading in response to the Russia-Ukraine conflict.