Daily Macro And Crypto Markets Update: Large OTC Activity Hints At Increasing Institutional Demand

Of course, people will try to tell you that this is transitionary… 

I’m doubtful, and investors seem to agree. While it’s happening, gold is having a field day and is on an incessant ramp-up.

In the crypto space, you can see a correlation with equities that got sold. BTC that was hovering around 66K last week closed Friday at around 63K. What I love to see, though, is that we’ve already climbed some of the way back over the weekend. BTC is currently a tad over $65,000.

The BTC dominance is slightly up as alts aren’t picking up; the previous pullback still constrains them. 

Nothing to despair, though. USD price-wise, even with the pullback, alts are holding up well, with ETH still above $4,600, AVAX made great moves over the weekend, and STX is still around all-time highs.

A fascinating chart from CryptoQuant shows whale activity taking place on the blockchain while the exchange inflows and outflows remain somewhat normal. This hints at prominent players engaging in OTC deals, presumably to buy BTC, and so this would hint at a continued, if not increasing, institutional demand. Even at these elevated prices.

Another dynamic that I’ve observed in the past year or two is the growth of stablecoins. They’re definitely very useful in crypto exchanges and wallets and not exposed to any particular cryptocurrency. The supply is steadily ramping up, which (as always) highlights more capital flowing into the space to be allocated (or is already allocated).

It’s also fascinating to see rates from major lending desks far exceed the rates you’d get on even US junk bonds and massively more than US savings accounts. So, in the long run, I’d be expecting a flurry of savvy investors to gradually make a switch towards those new -and profitable- solutions.