When the COVID-19 pandemic began, Private and institutional Bitcoin investors took very different approaches, as new research by OKEx Insights and Catallact showed.
The study, which analyzed on-chain data from BTC transactions from January to early August 2020, found that private investors largely withdrew and followed a wait and see strategy with Bitcoin.. Larger, possibly more institutional investors, on the other hand, hoard BTC. The report does not take into account transactions in August and September when prices fell.
Retail stores that account for less than a tenth of a coin make up the majority of the BTC movement and track price fluctuations more closely. These investors tend to be more easily “ripped out” of the market during times of high volatility and dramatic price falls, “the report said, which is exactly what the researchers found.
The number of small daily BTC transactions went down, waiting to be seen once the price of BTC hit $ 10,000 in May. Source: catallact
According to data from Retail transactions “declined and diverged from price action, suggesting retail investors wait as BTC is a post-crash period of accumulation for a season,” around May.
Medium-sized transactions attributed to miners and large retailers were more cautious as the pandemic began. However, it appeared that this behavior only lasted until June when activity resumed.
When data is moved around to track transactions over 1,000 BTC, this gets interesting. As BTC approached $ 10,000, the number of transactions between 1,000 and 5,000 BTC has continued to rise since the end of June, although the price began to consolidate.
“This upward trend suggests the possibility that institutions and / or large players were busy hoarding BTC as central bank economic stimulus measures spurred buying hard assets.. However, since we cannot clearly distinguish what actual activity has taken place from the number of transactions alone, this remains a speculative possibility, ”the report said.
Transactions of 5,000 BTC and above also spiked from mid-May to mid-July, leading the researchers to two possible conclusions: The exchange of cryptocurrencies may have exchanged currencies in different wallets for a variety of reasons, most likely for security reasons. or large institutional investors entered the market and accumulated BTC in anticipation of rising or falling prices. The report found that the impact of COVID-19 on global markets may have led major investors to turn to BTC to hedge against fiat inflation.
The number of transactions between 5,000 and 10,000 BTC increased dramatically in the summer of the Bitcoin price consolidation. Source: catallact
OKEx’s report showed that the first few months of the pandemic affected the way people moved in the market, particularly as retail investors pulled back to wait for prices to normalize.. Large investors, on the other hand, “bought the dip” and began hoarding BTC.
Cointelegraph reported that BTC prices are boring and stable, but could hit $ 16,000 with a broken resistance level.