Ki Young Ju, the CEO of on-chain analytics firm CrypotQuant, has pointed out he believes massive outflows from Coinbase, worth over $500 million in bitcoin, are “the strongest bullish signal” in the market right now.
On Twitter, the CEO revealed that over 15,000 BTC were moved out of Coinbase and went into custody wallets that only have in-going transactions, suggesting large investors are accumulating the cryptocurrency after buying through over-the-counter deals.
Ki Young Ju further pointed out that looking at the transactions the funds were moved in, it’s clear these were not internal transactions are they weren’t for round numbers, but instead specific amounts. Moreover, they were split into several wallets which “increases security cost,” and Coinbase Custody is integrated with over-the-counter trading desks.
Earlier this year, CryptoQuant spotted several large transactions moving out of Coinbase to “custody-look-like wallets,” shortly before the price of bitcoin hit a new all-time high near $42,000. Demand from institutional investors on Coinbase is believed to be so large that when they start buying a premium develops.
If the premium on Coinbase drops or disappears, that means institutional investors and other large players are no longer heavily accumulating BTC, and as such buying pressure has dropped significantly. If it grows, it means institutional investors and other large players are buying up bitcoin.
If these are indeed institutions buying BTC, the volume is noteworthy as, since the block reward halving, the rate of new BTC entering the market has slowed down. It’s estimated miners aren’t minting enough to cover these large outflows.
As not enough coins are being minted to keep up with demand, some analysts believe a supply squeeze will lead to further upward price movements. Institutional demand for the flagship cryptocurrency has been growing over the last few months, with MicroStrategy leading the charge after buying up 70,470 BTC for $1.135 billion. The firm’s coins are now worth over $2.3 billion.
As reported, the CEO has recently said he has “no doubt” the price of bitcoin will hit $100,000 this year. The crypto CEO is well-known for being bullish on bitcoin, and has in the past used various metrics to predict this year’s bull run.
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