The Coinbase Premium Index, which tracks the Bitcoin price gap between Coinbase Pro and Binance, has reached a 12-month low, raising concerns about potential lack of institutional demand for the cryptocurrency.
What is the Coinbase Premium Index and Current Market Outlook
The Coinbase Premium Index measures the price gap between Bitcoin on Coinbase Pro and Binance, gauging US investor demand relative to the global market. Negative readings indicate selling pressure. As of December 31, 2024, this index dropped to 0.237, marking a 12-month low. CryptoQuant analyst Burakkesmeci notes that the increasing seller pressure in the US market coincided with Bitcoin’s drop to $91,500, indicating a lack of institutional interest.
Key Bitcoin Price Trend to Watch in Coming Weeks
The year 2025 began with optimism for Bitcoin's price, indicating a continuation of an uptrend. At press time, Bitcoin was trading at $97,337. Trends to watch in the coming weeks include the US political future, as Donald Trump’s inauguration is expected to affect the cryptocurrency's price. His administration may introduce policies fostering Bitcoin adoption and attracting investments.
Bitcoin ETF and the Latest Price Forecast
The Bitcoin ETF market has been relatively subdued in recent days, recording substantial outflows before seeing $5.3 million in inflows on December 31, 2024. While Fidelity’s FBTC witnessed the highest inflows amounting to $36.8 million, BlackRock’s Bitcoin ETF recorded the highest outflows at $23.5 million. Despite the subdued institutional interest, the market continues to garner attention, with investment manager Bitwise announcing plans to launch a new crypto ETF.
The Coinbase Premium Index reaching its lowest levels in a year indicates a decline in institutional demand for Bitcoin. However, changes in macroeconomic conditions could influence the market, creating growth opportunities.
