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Institutional Interest in Bitcoin Cooling as Stablecoin Metric Signals Caution
Aug. 16, 2024. 1 min. read.
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Institutional interest in Bitcoin is declining as stablecoin activity drops, signaling reduced buying at $58,000. Analyst Markus Thielen notes fewer dollars are being converted into crypto recently.
Institutional interest in Bitcoin appears to be waning as the leading stablecoin indicator suggests a slowdown in buying activity at the current $58,000 price level. According to crypto analyst Markus Thielen from 10x Research, a key metric that often signals institutional buying power has significantly decreased over the past week.
The seven-day minting ratio, which measures the creation and issuance of new stablecoins, has cooled off recently, indicating that fewer U.S. dollars are being converted into crypto. “Institutions that funneled fiat into crypto through Circle took advantage of the dip below $55,000 but seem less inclined to pursue the market at current levels,” Thielen noted in his August 16 report.
This slowdown is particularly evident when compared to early August, when Bitcoin’s price fell to $49,472. At that time, the stablecoin inflow metric surged sharply on August 6, reaching $2.7 billion. However, despite Bitcoin still trading below the critical $60,000 level, the metric has since dropped to $1.4 billion.
Thielen also pointed out that while Tether remains active in the market, Circle, the issuer of USD Coin, has become “notably quiet again.” This shift in stablecoin activity could be a sign that institutions are holding out for a further decline in Bitcoin’s price before re-entering the market.
As of now, Bitcoin is trading at $58,149, down 0.35% in the past 24 hours, according to CoinMarketCap data. The Crypto Fear & Greed Index has also dropped to a “Fear” score of 27, reflecting the current cautious sentiment among investors.
Despite this, some analysts believe that Bitcoin’s bull rally could continue into the third quarter of 2025, based on previous market cycles. However, the immediate outlook remains uncertain as institutions wait for more favorable market conditions.
Institutional Interest in Bitcoin Cooling as Stablecoin Metric Signals Caution
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