Institutional investors and long-term Bitcoin holders are displaying signs of heightened bullishness, as indicated by several key indicators reaching new highs, according to a report by ARK Invest. The latest issue of The Bitcoin Monthly, described as an “earnings report” that provides insights into on-chain activity, reveals that the balance of Bitcoin held on over-the-counter (OTC) desks has reached an all-time high. The total amount of Bitcoin sitting on these desks has seen a remarkable 60% increase this quarter, with nearly 8,000 Bitcoin currently held.
Ark Invest says OTC Bitcoin has reached a record high
ARK Invest, led by Cathie Wood, considers OTC desk balances as a proxy for institutional activity, suggesting that the rising numbers indicate an increasing focus on Bitcoin by institutions and other significant capital allocators. This interpretation is viewed as a bullish sign by ARK. The report also explores the performance of Grayscale’s Bitcoin Trust (GBTC), a firm that caters to large and accredited investors.
GBTC has witnessed substantial growth this year, with its shares doubling in value. Starting the year at $8.65, GBTC shares are now trading at $20. Additionally, the “GBTC Discount,” which refers to the difference between the share price and the net asset value (NAV) of GBTC’s holdings, has narrowed to -30%. ARK suggests that this could be an optimistic signal to recent ETF filings.
Unmoved Bitcoins make new records amid trader confidence
Long-term Bitcoin holders are often seen as a positive indicator of the strength of the network, a sentiment with which ARK agrees. The report highlights that nearly 70% of the circulating supply of BTC, which amounts to 19 million coins, has not been moved in over a year. This represents an all-time high in both relative and absolute terms and reinforces the notion of long-term conviction among Bitcoin holders.
In addition to OTC balances and long-term holdings, the report examines 13 metrics related to Bitcoin’s network. These metrics cover various aspects such as percent supply in profit and miner difficulty. ARK notes that out of these metrics, only transaction volume and time-weighted turnover are considered neutral, while the remaining indicators are signaling bullish trends.
The findings of this report indicate a growing interest in Bitcoin among institutional investors, as reflected in increased balances on OTC desks. The rising value of Grayscale’s Bitcoin Trust and the narrowing of the GBTC Discount further support the notion of growing confidence in the asset. Furthermore, the high percentage of long-term holders and the bullish signals from network metrics contribute to an overall positive outlook for Bitcoin.
As the cryptocurrency market continues to evolve, monitoring institutional activity and the behavior of long-term holders becomes crucial in gauging market sentiment and potential future price movements. The sustained interest from institutional investors may have a significant impact on Bitcoin’s trajectory and further validate its status as a recognized investment asset class.
