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Bitcoin’s Recent Outperformance Fueled by Institutional Demand, JPMorgan Says

There has been a significant bitcoin inflow into larger wallets, which suggests institutional investor demand, the report said.

Updated Oct 26, 2023, 3:07 p.m. Published Oct 26, 2023, 9:56 a.m.
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Optimism about the approval of a spot bitcoin [BTC] exchange-traded-fund (ETF) by the U.S. Securities and Exchange Commission (SEC) continues to grow, JPMorgan (JPM) said in a research report on Wednesday.

This optimism is reflected in bitcoin’s strong outperformance versus other digital assets, the report said, noting that the world’s largest cryptocurrency recently made a new high for the year.

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“It looks like this latest flow impulse had institutional participation,” analysts led by Nikolaos Panigirtzoglou wrote.

The bank’s analysis of the crypto futures market supports this assertion.

“Our futures position proxy based on CME bitcoin futures, which tends to be used mostly by institutional investors, has spiked over the past week rising not only to the highest level for this year but also to levels last seen in August 2022 before the FTX collapse,” the analysts wrote, referring to the Chicago Mercantile Exchange.

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JPMorgan says the equivalent futures position proxy for CME ether [ETH] futures remains subdued.

Institutional participation in the recent rally is also reflected in analysis of bitcoin flows, the note said. There has been a large BTC inflow into larger wallets, which points to institutional investor demand.

This contrasts with previous quarters “when the bitcoin impulse was led by smaller wallets thus more driven by retail investors,” the report said.

Read more: Bitcoin’s Rise Fueled by U.S. Investors Buying Ahead of Potential Spot ETF Approval: Matrixport

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Exchange Review - March 2025

Exchange Review March 2025

CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.

What to know:

Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.

  • Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
  • Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions. 
  • Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.

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