Coinbase experienced its largest outflow ever last week, with 10,756 Bitcoin withdrawn in a single hour, worth about $1.1 billion.
Many interpret this as crypto whales and institutional investors seize the opportunity to buy the dip and gear up for another potential rally.
A record-breaking outflow
According to analysts at CryptoQuant, this massive outflow from Coinbase came right after the Federal Reserve announced interest rate cuts.
The first transaction saw 8,093 BTC leave, followed by another 2,557 BTC shortly after, and such big withdrawals from centralized exchanges often indicate that investors are looking for long-term holds rather than quick trades.
While this outflow is a positive sign for market sentiment, it also highlights the pressure on exchanges like Binance and Coinbase, where inflows can lead to increased selling activity.
Buying the dip?
Most of the recent Bitcoin purchases during this market dip have been made by institutional investors, and retail traders have been cashing out to lock in profits after Bitcoin hit all-time highs.
In contrast, larger players are holding onto their assets for the long haul, especially with positive economic indicators coming from the U.S.
The spike in outflows coincided with the U.S. Federal Reserve’s decision to cut interest rates by 25 basis points on December 18, bringing them to their lowest levels since February 2023. This move tends to encourage investments in riskier assets like cryptocurrencies.
Institutional interest on the rise
The uptick in Bitcoin buying is also linked to spot Bitcoin ETFs and other institutional activities, and analysts believe this could signal a strong rebound for Bitcoin prices in 2025, because it’s clear that institutional players are becoming increasingly influential in the Bitcoin market.
“The scale of this transaction indicates institutional buying or intermediary purchases driven by Spot ETF demand.”
For example, Hut 8 recently purchased 990 BTC worth around $100 million, raising its reserves above $1 billion.
Similarly, Riot Platforms splurged $525 million to acquire 5,117 BTC, further fueling bullish activity.
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