While bitcoin was cratering over the weekend, institutions were buying

Bitcoin is recouping losses clocked in over the weekend, which isn't a surprise to market participants servicing institutional investors.

At last check, bitcoin was trading up more than 9% at more than $37,000. That's a far cry from the levels over the weekend, when a wave of liquidations across off-shore trading venues sent the market tumbling to $30,000. While retail traders were selling, institutions were overwhelmingly skewed to the buy side, says Cambrian CEO Martin Green. 

"Institutional buyers were buying up those tips, taking advantage of retail de-leveraging," the hedge fund executive said. "You could see [dips] quickly bought up."

The following chart shows bitcoin's price performance earlier in the week. 

Indeed, over the weekend, bitcoin financial-services provider NYDIG said that its institutional clients were overwhelmingly skewed to the buy side — which indicated that the market could soon recover from its lows.

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“Our institutional client base saw the drawdown as a buying opportunity," the firm told The Block. "During the drawdown, a full 89% of our client orders were to buy. We see that our client base, made up of institutions with very long-term time horizons, such as insurance companies, see pullbacks as a time to add to their positions.”

At the same time, data from Coinbase shows that retail users were far more bearish, skewed only 38% to the buy side. 

"The initial move triggered selling from retail on Coinbase (see chart) and also retail platforms that use Coinbase for liquidity," a message from the firm to clients noted. "The buy ratio for Coinbase retail has been approximately 60% over the past two weeks, but on Sunday this was 38% as people rushed to take profits."

It added that market participants on the institutional side were buying, with some noting that they wouldn't be surprised if bitcoin hits $40,000 by week's end. From the note:

"Speaking to other market participants, a similar story unfolds. Many saw selling over the weekend but have a long list of buyers that they expect to step in and support Bitcoin here. More than one has commented that they wouldn’t be surprised to see BTC back at $40k later this week."

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Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].