The recent surge in interest from large institutional investors in cryptocurrency prompts a reconsideration of the current market state. Despite growing capital inflows, several signs indicate a possible slowdown.
Increase in Corporate Investments in ETH
Data from 10x Research indicates that many public companies have begun adding Ethereum (ETH) to their assets. The total value of ETH held by these companies exceeds $5 billion. The most significant player in this segment is Bitmine with $2.2 billion, followed by Sharplink, Bit Digital, and BTCS, which together account for about 1.06% of the total ETH supply.
Additionally, a new firm called Ether Machine plans to enter the market with capital of around $1.6 billion, which could further increase the share of institutional investors in ETH.
MicroStrategy's Cautious Approach
An interesting development in the market has been the lack of active measures from MicroStrategy, known for its significant Bitcoin reserves. Previously, during bull runs, the company often raised funds by selling new shares to increase its Bitcoin holdings, but now, as noted by 10x Research, MicroStrategy hasn't raised any capital in weeks. This silence may indicate that the company no longer sees significant upside or senses risks. Thus, this is viewed as a clear sign that market momentum might be fading.
What Retail Investors Should Know
Despite these inflows, 10x Research notes that cracks are forming beneath the surface. Shifts in trading volumes, fading NAV premiums, and weakening funding rates are all signs that could indicate a slowing market momentum, even while headlines remain bullish.
While institutional investments in cryptocurrency are increasing, some signs suggest potential slowdowns in market activity. Investors are advised to consider these warnings to understand the dynamics of market changes.
