The drastic decline in bitcoin’s price this crypto winter may have peaked the interest of institutional investors. According to recent data, there is a spike in volume for the bitcoin exchange-traded product (ETP) on the SIX Swiss Stock Exchange.
The ETP traded on Switzerland’s SIX exchange has the HODL ticker symbol. Amun Crypto launched it in November 2018. The ETP represents a fully collateralized and non-interest-paying bearer debt security similar to an index and consisting of 5 cryptocurrencies.
Comprising the ETP is bitcoin (BTC) at 48%, followed by XRP at 30%, ethereum (ETH) at 17.6%, and smaller amounts of bitcoin cash (BCH) and litecoin (LTC).
Are Institutional Investors Buying the Dip?
The recently launched Bitcoin ETP has experienced record volume this past week, signaling that institutional buyers may be scooping bitcoin up at the lowest prices this year.
Covering various statistics of the Bitcoin ETP is Su Zhu, the CEO at FX Hedge Fund. According to Zhu and his gathered data, the ETP saw record trading volumes last Thursday and Friday with 53,233 shares and 62,986 shares traded, respectively.
Per Zhu’s analysis, the increase in volume is substantial compared to previous 1 month average volume that saw roughly 20,000 shares traded per day. The recent increase in volume coincides with bitcoin’s steep decline in price.
Zhu took his findings to Twitter where he shared a series of tweets with his analysis and charted data:
Last Thurs and Fri we broke volume records again on the Swiss HODL ETF with 53,233 shares and 62,986 shares traded respectively. That coincided with the dip in BTC to 3.2k and ETH to near 80. The correlation between volume and price continues to be very strong at (-68%). https://t.co/Meuaa9MXCV
— Su Zhu (@zhusu) December 11, 2018
As stated in the tweet, there is an obvious negative correlation of -68% between price and volumes observed with the HODL ETP. What he means by this is as the BTC price decreases the ETP volume increases which means investors are buying up bitcoin at low prices.
Zhu also notes that a high percentage of the volume is a net inflow of capital, which means institutional investors are placing far more buy orders than sell orders. Therefore, it seems clear institutional investors are buying the dip.
Are you buying bitcoin at these prices? Do you think we have reached the bitcoin bottom? Let us know in the comment section below.
