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Crypto Firm Grayscale Sees Notable Institutional Inflows in Q2

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One of the common critiques that cynics use to bash the Bitcoin and cryptocurrency space is that this whole market is retail-driven. In 2017, this may have been the case. Then, Wall Street was still in the midst of learning about Bitcoin and its ilk and thus made no announcements on the matter.

For some reason, skeptics of this industry have taken this narrative and applied it to 2019. But, Nasdaq, CBOE, CME, New York Stock Exchange, TD Ameritrade, JP Morgan, Ernst & Young, and countless other big names in finance have launched or are working on cryptocurrency products.

And most importantly, a report from industry investment firm Grayscale suggests that institutions continue to siphon fair amounts of capital into this space.

Grayscale’s Crypto Fund Inflows “Dominated” by Hedge Funds

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Just like other investors, Grayscale’s clients have also been subject to the fear of missing out. As revealed in the firm’s latest Digital Asset Investment Report for Q2, it secured over $84.8 million in investment during the last quarter, marking the strongest inflows since the true start of the bear market in Q2 of 2018.

Per the report, much of the capital that Grayscale received in Q2 was allocated to its Bitcoin Trust, the firm’s flagship vehicle that trades on American over-the-counter markets. This may be one of the reasons why Bitcoin dominance has rallied in this uptrend, not declined as it did in early-2018. What’s also interesting is that a purported 84% of the $84.8 million inflow was sourced from institutional players, mainly “hedge funds”.

Bitcoin Dominance Rally a Clear Sign of Institutions

This seemingly confirms a report from FN London, which stated that Bitcoin’s rally from $3,150 to over $10,000 was supported by funds, not retail investors.

Fund managers and cryptocurrency executives speaking to the outlet explained that the rapid growth in Bitcoin dominance, which is up to 66% from 33% at the peak of 2018’s mania, is the perfect indicator of renewed institutional investment. Jamie Farquhar, a portfolio manager at NKB Group, said:

“My view of the recent rise in Bitcoin dominance is that much of this move was driven by institutional buyers. Macro managers and high net worth individuals are generally, in my experience, focused almost entirely on BTC.”

In other words, Bitcoin is effectively the favorite cryptocurrency for institutions.

Fidelity Investments’ involvement in this industry corroborates this. For years now, the Boston-based financial services giant has been laser-focused on Bitcoin, with reports revealing the company has been mining BTC for years. Aside from a mining operation, the company also has custodial services and a trade execution desk for Bitcoin, and Bitcoin only.

You can see a similar trend with the cryptocurrency-focused financial vehicles already on the market, or those that are looking to come to market. Look no further than the incessant stream of crypto-backed exchange-traded fund applications. Notice how nearly all of them are 100% Bitcoin, save for a few outliers such as Crypto Crescent’s Bitcoin and Ethereum fund announced earlier this month.

So again, the fact that Bitcoin dominance is shooting higher, even as some altcoin projects have begun to deliver impressive products, only gives credence to the “institutions are here” narrative

Binance CEO Begs to Differ

What’s weird is that Changpeng “CZ” Zhao, the chief executive of Binance, noted that the so-called “institutional herd” is not as present as some may say.

Speaking to Bloomberg, the Chinese-Canadian businessman suggested that Bitcoin’s move to $10,000 and beyond wasn’t mainly catalyzed by your average institutional player.

Instead, Zhao notes that it’s been a combination of retail and institutional investment. Backing this quip, the CZ cited data from Binance, claiming that 60% of all trading volume on Binance is a result of retail players — about the same percentage as it was last year.

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Crypto Tidbits: Bakkt’s Bitcoin Futures, Coinbase & Xapo, IRS Cryptocurrency Crackdown

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Another week, another of Crypto Tidbits. While this week was crazy bearish for the Bitcoin price, the fundamental developments seen made up for the market collapse. Bakkt revealed that it will be finally launching its Bitcoin futures product; Coinbase made a large acquisition of a facet of Xapo; and Binance revealed that it will be taking its formal step into the U.S. market in the coming months.

It wasn’t all sunshine and rainbows, however. A massive cryptocurrency scam trended on Crypto Twitter and a number of verdicts on Bitcoin exchange-traded funds (ETFs) were put off once again.

Related Reading: Crypto Tidbits: Bitcoin Mining by Blockstream, Ripple Investment Plans, Binance US Unveils Altcoin Lineup

Bitcoin & Crypto Tidbits

  • Bakkt Cleared by NDFS, Will Launch Bitcoin Futures in September: That’s right folks, Bakkt is finally ready to (fully) launch its Bitcoin futures contract to the world. Announced via a surprising blog post on Friday, the cryptocurrency exchange, which has been backed by players like the New York Stock Exchange, Microsoft Ventures, and Starbucks, has received NYDFS and CFTC — the two financial regulators involved in such cryptocurrency vehicles — clearance to offer its physically-deliverable Bitcoin futures to clients. The prominent startup is eyeing a September 23rd launch date. Analysts have stated that the product is likely to see mass adoption from the get-go, and might be the catalyst that slingshots the industry into its next round of rapid growth.
  • IRS Continues Crypto Crackdown… And It’s Not Done Yet: The Internal Revenue Service of the U.S. has continued its crackdown on American crypto investors, recently issuing yet another round of letters. The letters, according to CoinDesk, were sent to those that the IRS believes are skirting taxes on cryptocurrency trades. This comes shortly after the tax agency sent a preliminary warning to thousands of Coinbase users. A slide deck leaked on Twitter suggested that the IRS is likely to only expand its cryptocurrency-related collection efforts.
  • PlusToken Scam Trends on Twitter, Causes Mass Panic in Bitcoin Markets: This week, prominent cryptocurrency venture capitalist Dovey Wan issued dozens of tweets about a scam called “Plus Token”. As this scam originated and operated in Asia, it caught a large portion of Crypto Twitter by surprise, despite the fact that the scheme had been going on for just around a year. Wan claimed that while the ringleaders of the $3 billion scam had been caught, blockchain evidence suggested that PlusToken’s wallets, which contains hundreds of thousands of Bitcoin and Ethereum, was sending capital to exchanges. This result in fears that the market was going to dump.
  • Institutions Are Foraying Into Crypto: According to a recent tweet from Brian Armstrong, the chief executive of Coinbase, there is no question that institutions are starting to make bonafide forays into “crypto”. Citing data from his firm’s deposits, there is around $200 million to $400 million worth of cryptocurrencies deposited into Coinbase’s coffers each week from “institutional customers”.
  • Coinbase Picks up Xapo’s Institutional Custody Division: According to Fortune, Coinbase has acquired Xapo’s institutional custody business. for $55 million, outbidding Wall Street’s Fidelity Investments It isn’t clear if any of Xapo’s employees or executives will be jumping ship. But, it has been confirmed by a source that a “majority of Xapo’s largest clients” will be transferring their assets to Coinbase’s custody unit, which now owns over 514,000 BTC — wow. It is important to note that with this deal, Xapo isn’t leaving the crypto custodian business. Far from, in fact. Speaking with Fortune, Casares has stated that it will still have control over its famous Swiss vault, which he claims will be used to store Bitcoin on behalf of Xapo’s retail clients.
  • Binance to Launch U.S. Branch: Speaking to Cheddar, Binance’s Changpeng Zhao revealed that his company will likely be launching the U.S. branch of its service, which was launched to combat regulatory concerns, by November.
  • NBA’s Dallas Mavericks Now Accepts Bitcoin: Despite the fact that it may be just a PR stunt, the NBA’s Dallas Mavericks, owned by Mark Cuban, will now be accepting Bitcoin as a method of payment for game tickets and merchandise. Announced via a press release on August 13th, the Dallas Mavericks has become the second team in the NBA to directly accept Bitcoin. Per the release and tweets posted by those involved in this sudden move, BitPay will be the payment processor in this move.
  • Ciphertrace Finds Cryptocurrency Crime is Still a Massive Industry: According to a recent report from industry analytics firm Ciphertrace, bad actors online have managed to make billions through digital asset-related crime in 2019 alone. The report, which is titled “Q2 2019 Cryptocurrency Anti-Money Laundering Report”, found that aggregate losses incurred by investors and firms due to cryptocurrency crime has reached $4.3 billion in the first half of 2019. 5% of the sum was sourced from hacking. Around 20% of the illicit gains were a result of misappropriated funds. And these rest of the gains were stolen through exit scams, like the aforementioned Plus Token.
  • Bitcoin ETF Proposals Delayed… Again: The U.S. Securities and Exchange Commission (SEC) has delayed its verdict on proposals in this class for the umpteenth time. On Monday, it simultaneously issued a delay verdict on three Bitcoin-backed funds from Bitwise Asset Management, VanEck and SolidX, and Wilshire Phoenix.

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Bitcoin, Bitcoin Cash, and Binance Coin Price Prediction and Analysis for August 17th: BTC, BCH, and BNB

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On an intraday chart, the price of BTC/USD pair has further dipped from the previous price of 10473.00 and is currently changing hands at $9917.57 that translated to an intraday dip of 5.3%.  The bulls seemed to have lacked the means or strategy to pull up the market momentum. This was reflected by the 21 day MA that hovered above the 7 day MA over the last 24hrs.

The RSI was also seen trading below the oversold territory that signaled a buy sign.  This also confirmed sellers have the upper hand.  At around 06:00 traders brought the momentum back up as reflected by the RSI indicator that is currently heading north indicating an increase in buyouts.

bitcoin price chart august 17th

BITCOIN PRICE PREDICTION (BTC/USD)

Currently, most indicators signal price recovery shortly.  The parabolic indicator is presently below the pair’s price that indicates a buy signal.  The RSI indicator has also gained momentum and is tending Northway that signal a bullish outlook.  New target should be set at $10400.0

BITCOIN CASH PRICE ANALYSIS (BCH/USD)

BCH/USD has also exhibited a bearish momentum over the last 24hrs.  BCH has down surged by 14.4% where it sharply faced a price fall from yesterday’s price of $342.6 to currently changing hands at $293.1.  The downward move has been bolstered by the 21 day MA that gravitated above the 7 day MA throughout the intraday, which also signaled an increase in sell-offs.

The RSI indicator was also seen below the oversold territory that gives traders a negative sign.  The downwards pressure has led to $5.581 billion by market capitalization with a circulating supply of 17.95 million coins.

bitcoin cash price chart august 17th

BITCOIN CASH PRICE PREDICTION (BCH/USD)

A further downtrend is likely since the parabolic SAR is currently above the price and the price is above the moving averages.  Conversely, if the price breaches the moving averages, it can shift up to 340.00 level.

BINANCE COIN PRICE ANALYSIS (BNB/USD)

BNB/USD pair has also lost by 7.2% in the last 24hrs; the pair’s price started the sell-off trading at $28.5126 and is now trading at $26.4404.  The bears seemed to have the upper hand since both moving averages are sloping downwards. 

However, the traders seemed to remain on the sidelines since they are waiting for a reliable sell setup to form.  The RSI indicator that is currently heading north confirmed this. An upsurge above $27.4103 is likely to be seen.

binance coin price chart august 17th

BINANCE COIN PRICE PREDICTION (BNB/USD)

At the moment, all the indicators point at a more bearish outlook since the 21 day MA is still above the 7 day MA.  Parabolic SAR is also above the candles that is a sell sign. However, if the price breaks above the 21 day MA, traders should go long and take profit at $28.0000.+

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Crypto Whales Are Buying the Dip on Coinbase, Says Crypto Analyst

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A majority of investors with large Bitcoin holdings are buying the dip instead of selling, according to new data from Coinbase.

Crypto researcher Larry Cermak highlighted the data on Twitter, which is available via Coinbase’s new trading signals initiative.

The signals, launched last month, are designed to offer fresh insight on trading activity and how Coinbase users are reacting to the markets.

The “top holder activity” signal analyzes the biggest holders of a given crypto asset on Coinbase, revealing how many users in the group have bought or sold their positions in the last 24 hours.

Coinbase is also showing average hold times, which is the median number of days an asset stays in a Coinbase customer’s account before it’s sold or sent to another address or wallet. A new popularity signal shows how many customers hold each cryptocurrency.

The last signal is a price correlation metric designed to give traders a look at whether the prices of certain crypto assets are correlated with one another.

Meanwhile, the crypto Fear & Greed Index, a measure of how fearful or confident Bitcoin traders might be, has recently dropped. 

Latest Crypto Fear & Greed Index

On Wednesday, the index fell to a 245-day low last seen when Bitcoin plummeted to around $3,200 in mid-December 2018.

The index ranges from 0 to 100, with the bottom suggesting that there’s “extreme fear” in the crypto market, which signals that the market could be nearing a bottom. The top suggests that investors are “greedy” indicating the crypto market could be overbought.

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