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Bitcoin Institutionals Buying In ETF Hope? Metric Says So


Data shows the Bitcoin Coinbase Premium has remained positive since the start of the year, a sign that institutional traders may be buying.

Bitcoin Coinbase Premium Gap Is Still At Positive Levels

CryptoQuant community manager Maartunn explained in a Quicktake post that there has been significant demand for Coinbase since the start of 2024.

The indicator of interest here is the “Coinbase Premium Gap,” which keeps track of the difference in the Bitcoin prices listed on cryptocurrency exchanges Coinbase and Binance. This metric can tell us how buying and selling behaviors differ between the two platforms.

When the value of this indicator is positive, it means that the price listed on Coinbase is greater than that on Binance right now. Such a trend implies the former is either receiving a higher amount of buying pressure or a lower volume of selling pressure.

On the other hand, the negative metric suggests Binance is observing a higher buying pressure compared to Coinbase as the price listed on it is higher.

Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Gap over the past week:

Bitcoin Coinbase Premium Gap

The value of the metric seems to have been going up in recent days | Source: CryptoQuant

As displayed in the above graph, the Bitcoin Coinbase Premium Gap had been negative during the last couple of days of December, but since the start of the new year, the metric has flipped green.

The indicator had shot up alongside the rally towards $45,000, a sign that users of Coinbase fueled the move. Interestingly, the metric remained positive during the crash a couple of days back, implying the platform continued to see relatively high buying pressure.

Not long after the crash, the Coinbase Premium Gap started climbing and has since reached some notable levels. What has followed this rise in the metric is the recovery that BTC has accomplished.

This would again imply that Coinbase users are driving the bullish price action. But who are the Coinbase users? As Maartunn notes, “it’s widely recognized that Coinbase is a preferred platform for U.S. institutional investors.”

Binance, on the other hand, receives more global traffic, so the Coinbase Premium Gap can provide information about how the buying pressure from American traders differs from that of world users.

As the metric has been positive recently, the US institutional investors could be accumulating currently (at least concerning what investors worldwide are doing).

“This has sparked speculation about whether MicroStrategy is acquiring additional Bitcoin or if these purchases are part of preparations for an ETF approval,” says the analyst. “We should have more clarity soon, as the ETF decision date is rapidly approaching.”

BTC Price

At the time of writing, Bitcoin is trading at around $43,800, up almost 3% over the past week.

Bitcoin Price Chart

Looks like the price of the asset has been slowly making recovery | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com


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