While cryptocurrencies like Bitcoin BTC/USD, Ethereum ETH/USD, and Ripple XRP/USD have been rallying and scaling fresh highs as compared to stablecoins, this expert believes that “big money” or institutional investors have been driving the price of these virtual currencies.
What Happened: While retail investors’ participation has increased over time in cryptocurrencies, the latest data from CoinTelegraph, citing Onchain metrics, has shown retail investor demand is drying up.
According to the report, the retail demand may have shifted to spot BTC ETFs, pension funds, and brokerage accounts.
On the other hand, the recent rally in virtual currencies has a “fundamental source,” as per DataTrek Research‘s cofounders, Nick Colas and Jessica Rabe.
With the low mobile wallet user count and stablecoin volumes, DataTrek attributes the source of the current up move in cryptocurrencies to institutional buying.
“To us, that reads as incremental institutional buyers rather than retail, since the latter would employ more online wallets and deposit more capital in dollar-based virtual currencies,” Colas and Rabe noted.
While BTC hit an all-time high of $123,091.61 per coin on July 14, ETH has jumped over 3.5% in the last seven days, inching closer to its 2021 record of $4,891.70 per coin.
This buying is also evident from many publicly listed firms adopting a new framework of adding crypto to their treasuries.
This follows the Financial Accounting Standards Board’s new accounting rule for realizing gains and losses from these currencies on the company's balance sheet every quarter.
“In short, we appear to be in a ‘Big Money’ rally for this asset class,” the DataTrek note added.
See Also: Riot Platforms Poised For GME-Style Squeeze? Analysts Point To High Short Interest, Golden Cross
Why It Matters: The blue-chip cryptocurrencies have pulled back after having a strong start in the third quarter, with Ethereum up 48% and Bitcoin up 9.50%.
Here’s how these crypto-linked ETFs have performed lately, signaling a rising demand from retail investors.
| Crypto-Linked ETFs | One-Month Performance | YTD Performance | One-Year Performance |
| iShares Bitcoin Trust ETF IBIT | 8.41% | 19.85% | 73.08% |
| Fidelity Wise Origin Bitcoin Fund FBTC | 8.49% | 19.85% | 73.27% |
| Fidelity Ethereum Fund FETH | 39.92% | 5.32% | 9.93% |
| iShares Ethereum Trust ETF ETHA | 44.63% | 5.27% | 9.79% |
| CoinShares Bitcoin and Ether ETF BTF | 25.15% | 8.36% | -14.66% |
| Global X Blockchain ETF BKCH | 16.93% | 15.46% | 19.29% |
| VanEck Digital Transformation ETF DAPP | 10.57% | 21.27% | 48.66% |
Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, ended higher on Friday. The SPY was up 0.42% at $637.10, while the QQQ advanced 0.24% to $566.37, according to Benzinga Pro data.
On Monday, the futures of the Dow Jones, S&P 500, and Nasdaq 100 indices were trading higher.
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