New data from Matrixport, a digital asset financial services platform, confirms that institutional investors are not abandoning crypto, especially Bitcoin. According to data, institutional investors currently account for 85% of Bitcoin purchases.
Matrixport’s head of research and strategy, Markus Thielen, said it shows that institutional investors are still very interested in crypto and is also a sign that a bull market is approaching.
Bitcoin’s Performance During Trading Hours Contrasts Buyers’ Sentiment
The report suggests that asset performance during US or Asian trading hours can help differentiate whether institutional or retail investors prefer it.
Matrixport further explains that if the 24-hour asset trading is performing well in the US trading hours, it indicates that the institutional investors of the United States are buying. However, if the asset does well during Asian trading hours, it is an indicator that Asian retail investors are buying.
#Bitcoin +40% this year? 🤑 Smart #investor using the new US #CPI data is a confirmation signal to buy Bitcoin and other crypto assets. 85% of moves that occur during US market hours = buying institutions. 💰 Allocate $100 million to crypto? 👉https://t.co/niRBFtbR3u pic.twitter.com/xzSS2mBIAS
— Matrixport (@realMatrixport) January 27, 2023
The report states the performance of Bitcoin (40% price gain since January 1) since the beginning of 2023. It states that the 40% rally of Bitcoin, with 35% return during the US trading hours, shows that 85% of BTC purchases came from the US base. investors. According to the report, this is a sign that US institutions are buying Bitcoin.
Theilen cited previous data showing that institutional investors showed interest in Bitcoin before other assets. In a word, using historical data as a guide, layer1 and altcoins will start outperforming Bitcoin soon.
The report also noted that news about other projects pushed the price of tokens like Aptos (APT) and Lido DAO (LDO). It also stated that the crypto rally started on January 12 regarding the release of US inflation data (Consumer Price Index) for December.
A Look at BTC’s Fear and Greed Index Can Explain Matrixport’s Logic
The US bureau of labor and statistics released it December consumer price index (CPI) on January 12, 2023. The index at 6.5 came out lower than everyone expected, indicating that the inflation rate is falling. A lower inflation rate is often a bullish indicator in crypto and financial markets, hence the logic behind Matrixport’s opinion.
According to crypto financial strategists, a “strong” mix of returns during US and Asian trading hours is responsible for APT’s price rally.
However, Bitcoin The Fear and Greed Index is 55, showing investors are currently very greedy for Bitcoin. It means more investors buy BTC now $22,963 price.
The emotions of buyers and sellers actively trading in the market often affect the price of crypto. That means negative news can lower asset prices, while positive news can drive them to new highs.
Bitcoin Fear and Greed Index is 55 – Greed
Current price: $22,963 pic.twitter.com/R3gTve8pup– Bitcoin Fear and Greed Index (@BitcoinFear) January 27, 2023
According to Forbes Advisor, an index of fear and greed measures overall sentiment and gauges Bitcoin’s dominance in the market. A greedy market, Bitcoin is becoming more dominant. Now that the Fear and Greed Index is high, more institutional and retail investors are turning to BTC, probably out of fear of losing it.
Therefore, when investor sentiment becomes very bullish, they buy more BTC and can increase their returns. However, it is important to note that the Fear and Greed Index does not react to long-term bulls. It only follows current news events and short-term changes in the crypto market.
That could be why the Matrixport report cited the news surrounding December’s CPI as one of the factors driving more investors to buy Bitcoin. According to the report, the continued increase in institutional adoption will be a positive sign for BTC.
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