99% of transactions on the Bitcoin network are buy and sell orders over $100,000 in volume. Major investment funds rate cryptocurrencies as an asset class to invest in.
According to a report from IntoTheBlock, 99% of Bitcoin (BTC) transactions are purchases with a volume above $100,000. Large transactions have gradually dominated the Bitcoin network since early 2021. In addition, $1.2 billion worth of BTC has been withdrawn from the Coinbase exchange, according to data from Glassnode.
The document from IntoTheBlock also adds that despite the gloomy market environment, the number of Bitcoin wallets holding is increasing to the peak. Nearly 40 million wallets are having BTC balances greater than zero.
Miners are holding less and less BTC. This makes them less likely to exert a strong influence on the market. According to IntoTheBlock, the pressure from the difficulty of mining combined with the price of BTC plummeting and moving sideways for a long time caused miners to take profits.
In contrast, the drop in the price of BTC has not stopped investment funds from focusing on the cryptocurrency market, according to IntoTheBlock. Major hedge funds have been overwhelming in terms of Bitcoin trading volume since Q3 2020.
In addition to information from IntoTheBlock, Glassnode, an on-chain data delivery platform, also reported that 31,130 Bitcoins were withdrawn from Coinbase exchange last week. This is the largest amount of BTC withdrawn in a week since 2017.
“This has been the trend on Coinbase for the past 2 years. The main customers of this exchange are large funds and companies. So this is a signal that many investment funds are taking Bitcoin seriously," Glassnode shared in the document published earlier this week.
The list of major funds involved in investing in cryptocurrencies is getting longer and longer.
According to the WSJ, hedge funds that compare cryptocurrencies have many similarities with stocks. “Many hedge funds are looking at cryptocurrencies as an asset class to invest in alongside stocks, bonds, currencies and commodities. This market has matured," shared Robert Bogucki, investment director at Galaxy Digital fund.
According to Bogucki, venture capital funds often focus on price and trend analysis to make decisions to buy or sell cryptocurrencies. However, investment funds are limited to shorting cryptocurrencies because the market is volatile, which can cause them to lose heavily.
Other investment funds such as Jane Street in New York, USA said that many large investment funds are targeting the blockchain market. “The majority of our clients are funds that keep pouring money,” said Mina Nguyen, head of strategic analysis at Jane Street.
Some other fund models such as investment style using data have brought high efficiency. Alameda Research Investment Fund, a division of the FTX exchange known for its data and calculator investing. It is also the leading fund in the cryptocurrency market.