Bitcoin Outflows From Coinbase Suggest Institutions Are Buying the Dip

Big money continues to chase bitcoin on dips, blockchain data shows.

AccessTimeIconFeb 25, 2021 at 1:17 p.m. UTC
Updated Sep 14, 2021 at 12:17 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Large investors look to be accumulating bitcoin at relatively bargain prices in the wake of the cryptocurrency's recent pullback.

That's the suggestion of outflows of the cryptocurrency from institution-focused Coinbase Pro exchange, which rose to over 13,000 BTC, worth roughly $650 million, on Wednesday. The figure represents the largest movement of bitcoin off the exchange in three weeks, according to data shared by the blockchain analytics firm CryptoQuant.

"The outflow went to multiple custody wallets, indicating U.S. institutional investors are still buying bitcoin on the dip," Ki Young Ju, CEO of CryptoQuant, told CoinDesk. "I think it's a bullish signal."

The exchange's custody wallets are directly integrated with its over-the-counter (OTC) desk. Institutions typically transact over-the-counter to avoid influencing spot market prices. Hence, outflows from Coinbase Pro that end up in its cold wallets for custody are taken to represent institutional activity.

Bitcoin outflows from Coinbase Pro
Bitcoin outflows from Coinbase Pro

The latest pickup in outflows is a sign that institutions remain undeterred by the recent price pullback and are confident about cryptocurrency's long-term prospects.

Bitcoin tanked from record highs above $58,000 to $45,000 early this week in a typical bull market correction. The cryptocurrency has largely traded the range of $48,000 to $51,500 in the past 24 hours, according to CoinDesk 20 data.

Spikes in outflows from Coinbase Pro have consistently marked interim bottoms (the end of price pullbacks and the start of reversals higher) throughout the cryptocurrency's four-month bull run from $10,000 to $58,000. If history is a guide, bitcoin could soon begin the next leg higher.

On a more cautionary note, Federal Reserve Chairman Jerome Powell assured markets of continued monetary stimulus on Tuesday and Wednesday. So far, however, that has failed to put brakes on the rally in U.S. bond yields. Notably, the 10-year Treasury yield has now jumped to a fresh 12-month high of 1.45%, according to data source TradingView.

A continue rise in yields could stabilize stock markets, inviting selling pressure for bitcoin, as noted by trader and analyst Alex Kruger.

At press time, the cryptocurrency is changing hands near $51,863, representing a 2.2% gain over 24 hours.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.