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$500M in Bitcoin leaves Coinbase as institutions buy more than miners sell

12/24/2020

Big money is still scooping up the available Bitcoin supply despite short-term bearish signals, data shows.

Bitcoin (BTC) saw fresh rejection at $24,000 overnight on Dec. 24, but data shows that appetite for big buy-ins is only increasing.

As recorded by on-chain analytics resource CryptoQuant, institution-focused exchange Coinbase Pro alone saw two large withdrawals of more than 12,000 BTC ($278 million) each this week.

Coinbase outflows top $550 million

As Cointelegraph reported, while not proven, single large outflow spikes suggest that a buyer has purchased a large amount of BTC and the proceeds are being moved to a single storage wallet.

“Another big Coinbase outflows a few hours ago,” Ki Young Ju, CEO of CryptoQuant, added in Twitter comments.

“Institutional investors are buying $BTC.”

Coinbase Pro exchange flows chart. Source: CryptoQuant

In November, miners unlocked just under 28,000 BTC in block rewards — barely more than the sum total of the two Coinbase Pro transactions. This implied supply squeeze forms a central argument for continued upward price action.

Grayscale leads institutions vying for BTC supply

Underlying desire to suck up the Bitcoin supply at $23,000 contrasts with external factors influencing market sentiment, notably revolving around Ripple’s U.S. lawsuit and shifting expectations over the Mt. Gox rehabilitation proceedings.

Concerns that Ripple’s associated altcoin XRP could become all but untradeable thanks to legal action appeared to spark considerable volatility in Bitcoin over the past 24 hours. 

At the same time, the market is awaiting the distribution of funds to Mt. Gox’s creditors, who after a six-year hiatus may well be keen to sell some or all of their BTC at 2020 prices, resulting in $3.2 billion of additional selling pressure.

Beyond these short-term factors, however, it remains clear that institutions are bullish on Bitcoin as a whole, with fresh commitments surfacing almost constantly.

Investment giant Grayscale now controls $16.4 billion in assets under management, adding $500 million in a single day, its latest data from Wednesday confirms.