According to recent blockchain data from Glassnode, legislators and regulators increased monitoring of crypto markets, particularly the discussion over the US infrastructure bill crypto tax-reporting provision, maybe scaring ordinary investors but not institutional ones.
The Berlin-based blockchain data business discovered that larger investors, as reflected by large-value dollar transactions, fuelled Bitcoin’s roughly 20% price rise since last week. According to a lot of observers, this trend indicates that these businesses are focused on the cryptocurrency’s upside rather than its possible drawbacks.
Since the beginning of August, Bitcoin’s on-chain transaction volume with values of at least $1 million has increased 10%, accounting for approximately 70% of total value moved. Check Mate, a blockchain analyst at Glassnode, stated,
This blockchain metric represents rising institutional activities on the Bitcoin network since retail investors rarely move transactions on a scale to create such dominance.
In the meanwhile, as the figure below shows, tiny transactions have decreased as a fraction of the entire market. Since July 2020, the market dominance of transactions worth less than $1 million has decreased to about 30-40% from 70%.
The recent bullishness of institutional investors comes as the crypto market keeps a close eye on global political and regulatory developments, such as a contentious $28 billion tax reporting provision in the $1 trillion infrastructure bill in the United States, and an ongoing crackdown in Europe and other regions on Binance.
Several individuals said that as the sector grows, the crypto market has become accustomed to hearing from regulators. According to Glassnode, the average number of days each BTC transaction stayed idle or unmoved has climbed somewhat to about 10 days from seven days, indicating that some bitcoin “old hands” are not taking exit liquidity at this time.
The funding rate is calculated every eight hours and relates to the cost of maintaining long/short positions in the bitcoin perpetual market. Exchanges that trade perpetual utilize this measure to help balance the market and steer perpetual prices closer to the current price. Longs are paying shorts to keep the position open, and the market is biassed bullish with a positive funding rate.
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