Outflows from Coinbase’s institution-focused platform indicate that large or multiple large investors may be moving Bitcoin (BTC) for likely long-term storage or other purposes.
What Happened: Data from CryptoQuant, a provider of on-chain data, charts, and alerts, indicates that approximately 14,666 BTC flowed out of Coinbase Pro on Tuesday morning.
14.6K $BTC flowed out from Coinbase in the last hour.
Chart https://t.co/dcjhkuhzWc pic.twitter.com/y8JMwnRFZo
— CryptoQuant.com (@cryptoquant_com) March 23, 2021
At press time, BTC traded 0.53% lower at $54,556.78. This values the outflow at an estimated $800.13 million.
“The outflow was split into multiple wallets, which could be their hot wallets, representing an internal transfer or custodian wallets for institutions,” Ki Young Ju, CEO of CryptoQuant, told CoinDesk.
Why It Matters: Bitcoin on Monday dropped to the $54,000 mark, a level not seen in almost two weeks.
Outflows from Coinbase are often used as a metric to measure the institutional demand for BTC as the exchange’s cold wallets for custody are integrated with its over-the-counter desk, noted CoinDesk.
Institutional investors and large traders reportedly trade through the OTC desks to avoid having too much of an influence on prices.
See also: How to Buy Bitcoin (BTC)
“I think it’s likely to be a custodian wallet, which might indicate institutions are still buying the dip,” Ju told CoinDesk.
In February, Elon Musk-led Tesla Inc (NASDAQ:TSLA) purchased $1.5 billion worth of BTC. Other large investors who have exposure to BTC include MicroStrategy Incorporated (NASDAQ:MSTR) which owned 90,531 BTC, as of late February today worth about $4.93 billion.
See Also: Beyond Bitcoin: China’s Publicly-Listed Beauty App Meitu Buys $22M Ethereum
Jack Dorsey’s Square Inc (NYSE:SQ) also purchased $170 million worth of BTC in February after making a $50 million BTC purchase in October last year.
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