The latest analysis suggests that institutional appetite for Bitcoin slowly faded away because of the bear market situation leading to a significant drop in over-the-counter trades (OTC).
Several institutional players, during the bull run in 2021, piled into the leading Bitcoin but the interest faded when BTC price plunged to new lows in 2022. The flow of funds from this group has nearly diminished. River Financial outlined that an OTC desk acts as a dealer for traders wanting to trade a given asset. Such platforms are used when a given trade is impossible on centralized exchanges.
The seven-day moving average, as per Crypto slate’s analysis, for total transfers to OTC desk wallets is close to 2018 lows. Such trades peaked during the COVID-19 pandemic when Bitcoin was trading at $3000. But the market has seen considerable spikes since then and throughout 2021. However, it has now slowed significantly. In July 2022, OTC trades jumped when investors were reeling from the Terra ecosystem collapse.
Moreover, the world’s first Bitcoin ETF – Purpose Spot Bitcoin ETF has had a quiet year. It did not see any major activity since late July and early August. But Glass node data shows that the ETF BTC holdings surged between June and July 2022. The Purpose Spot Bitcoin ETF witnessed heavy outflows between May and July 2022. This coincided with when Bitcoin’s value slipped by 40% in July. The asset also saw inflows and outflows in early August and since then has seen little to no activity. However, it remains significantly above the levels in March 2021.