Demand for cryptocurrencies among institutional investors has dropped, according to a report by blockchain analytics company Glassnode.
One of the reasons cited in the report is bitcoin's slowdown and price collapse over the past few months.
To reach this conclusion, Glassnode used the Grayscale Bitcoin Trust (GBTC) investment product, which enables stakeholders and investors to trade shares in trusts that hold bitcoin.
Shares in GBTC are constantly being traded at a discount to net asset value (NAV). In fact, it's now cheaper to buy shares in GBTC than it is to buy bitcoin.
According to the company, the opposite was the case when bitcoin was in a bullish market, indicating that institutional appetite for BTC has dried up.
“Since Feb 2021, the GBTC product has reversed to trade at a persistent discount to NAV, hitting the deepest discount of -21.23% in mid-May”, the report explained.
Glassnode also noted that exchange-traded funds (ETFs) have decreased, citing Purpose and 3iQ as two examples. A total of 8,037 BTC has left the funds, the report continued.
Another reason for concern according to Glassnode was the coin balance on Coinbase, which remained “stagnant”. Coinbase has not elicited a strong interest from institutions looking to buy bitcoin, according to Glassnode.
While institutions may have become a little less interested in bitcoin, consumers seem to maintain a healthy outlook. Websites such as Bitcasino.io, 1xBit and FortuneJack continue to enjoy steady inflow of digital currency used to bet with.