Retail and institutional Bitcoin flow balances out in Q1

Retail and institutional Bitcoin flow balances out in Q1

By Hassan Maishera - min read

Leading investment bank JPMorgan Chase said institutional and retail Bitcoin flow balanced out in the first quarter of 2021

JPMorgan revealed that the retail and institutional Bitcoin flow were evenly matched in the first quarter of the year. The analysis conducted by the bank showed that retail investors were able to match institutional investors in this quarter, unlike the previous quarter.

JPMorgan tracks retail Bitcoin flows through Square and PayPal, while the CME Group’s Bitcoin futures market is the platform for tracking institutional flows. The analysis showed that retail flow saw a significant boost in Q1 2021 relative to the previous quarter. However, the institutional flow in this quarter is the same as the fourth quarter of 2020.

The bank said, “In other words, in Bitcoin terms, while the Bitcoin flow picture was dominated by institutional investors during Q4 2020, the flow picture has been more equally balanced between retail and institutional investors in the current quarter echoing Q3 2020”.

According to JPMorgan, “flow” is defined as purchases from the listed sources, reflecting activity from platforms that provide retail and institutional investors services. The data generated provides a measure of activity from both channels.

JPMorgan’s data showed that itBit’s daily trading volume (which the bank uses as a proxy for PayPal) went up by nearly 100% between Q4 2020 and Q1 2021. Furthermore, BTC payments facilitated by Square also doubled from the last quarter.

However, the same cannot be said for the CME Group. The platform’s indicator showed that its figures inched up slightly from 1,284 to 1,449. Despite institutional flow flattening in the current quarter, JPMorgan revealed that institutional purchases surged between Q4 2020 and Q1 2021.

This revelation came as Bitcoin surged to a new all-time high above $61,000 over the weekend. Its latest rally meant that it is up by 100% since the start of the year and more than 500% over the past six months.

As more institutional investors venture into the market, analysts believe that Bitcoin’s price could rally above $100,000 before the end of 2021. Bitcoin’s total market cap is above $1 trillion as it accounts for more than 60% of the entire cryptocurrency market’s volume.