Key points:
Coinbase’s institutional Bitcoin trading volume hits 75%, something that has always seen the BTC price rise a week later.
Institutions are buying a lot more Bitcoin than is being mined daily.
Risk assets are finding reasons to be bullish again as the US economic policy outlook improves.
Bitcoin (BTC) is due for fresh gains within a week as institutions step up BTC buying, new analysis predicts.
In an X post on Wednesday, Charles Edwards, founder of crypto quantitative digital asset fund Capriole Investments, pointed to booming outflows from US exchange Coinbase.
Analysis: Institutions should spark fresh BTC price gains
Bitcoin is once more a target for institutional buyers as US inflation cools and markets see lower interest rates next month.
Capriole data showed that on Tuesday, 75% of Coinbase’s volume came from institutional players.
“All readings above 75% have seen higher prices one week later,” he noted.
Capriole calculates institutional “excess demand” this week as 600% of the number of the roughly 450 BTC mined daily.
Bitcoin corporate treasuries alone added 810 BTC to their holdings Tuesday, with Monday’s tally even larger at nearly 3,000 BTC.
Bitcoin benefits from Fed rate-cut optimism
The moves accompanied lower-than-expected US Consumer Price Index (CPI) data for July and a BTC price push toward all-time highs.
Related: Ethereum hits new multiyear high as Tom Lee’s BitMine plans $20B ETH raise
Asked why institutions “went crazy” as a result, Edwards drew specific attention to the outlook for interest rates.
“Because yesterday inflation was as expected, which means it’s a certainty the Fed will cut rates next month, and probably 3 times this year,” he wrote.
“Market is now assessing possibility of a large 0.5% cut even, given the poor job backdrop. Rates down = risk assets up, and Bitcoin is the fastest horse historically.”
The latest data from CME Group’s FedWatch Tool shows markets overwhelmingly anticipate a 0.25% cut in September.
“Market-implied cuts for 2025 were unchanged following the release, with pricing still reflecting around 60bps of rate cuts,” trading firm QCP Capital observed about CPI reactions in the latest edition of its regular Asia Color market updates.
“The terminal rate has also held steady, despite a softer labour market and expectations for a more dovish Fed Chair in 2026. Futures positioning suggests investors see 3% as the Fed’s floor in 2026.”
QCP looked forward to next week’s Jackson Hole symposium for further cues as to the Fed’s next move.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
