As the price of bitcoin remains above $31,000 after dropping slightly from a new all-time high above $34,000, record outflows from popular cryptocurrency exchange Coinbase suggest institutions have kept on buying BTC, even above $30,000.
According to on-chain analytics data firm CryptoQuant, outflows from the professional trading platform of the San Francisco-based exchange Coinbase Pro, have hit a new all-time high on January 2, with 55,000 BTC moving out of the exchange’s wallets.
As CryptoGlobe reported earlier, these large transactions out of the crypto exchange suggest institutions are buying bitcoin. The CEO of CryptoQuant, Ki Young Ju, has in the past speculated these funds are moved to “custody-looked-like wallets,” potentially after Coinbase sets up a cold wallet for its customers from over-the-counter deals.
— Ki Young Ju 주기영 (@ki_young_ju) January 5, 2021
The chart the CEO shared shows that on January 2, BTC currently worth $1.7 billion left the cryptocurrency exchange. To Ki Young Ju, these outflows mean that bitcoin’s bull market isn’t over, despite the slight drop from BTC’s new all-time high.
If these are indeed institutions buying BTC, the volume is noteworthy as, since the block reward halving, the rate of new BTC entering the market has slowed down. It’s estimated miners aren’t minting enough to cover these large outflows.
As not enough coins are being minted to keep up with demand, some analysts believe a supply squeeze will lead to further upward price movements. Institutional demand for the flagship cryptocurrency has been growing over the last few months, with MicroStrategy leading the charge after buying up 70,470 BTC for $1.125 billion. The firm’s coins are now worth over $2.2 billion.
Galaxy Digital, Ruffer Investment, SkyBridge, MassMutual, and Square are some of the other firms that have allocated some of their capital to the flagship cryptocurrency. This week, the mayor of Miami, Francis Suarez, has revealed he is open to exploring allocating 1% of the city’s treasury reserves into bitcoin. Suarez has been exploring the cryptocurrency over the last few weeks.
Bitcoin’s new all-time high has led to several new bullish price predictions, including one from a team of J.P. Morgan global market strategists led by Nikolaos Panigirtzoglou, who reportedly wrote in a note to clients that over the long term Bitcoin’s price could get to $146,000 and higher.