Bitcoin Holds at $78,000 as Institutional Demand and Whale Activity Boost Recovery
Bitcoin's recent recovery has been supported by renewed institutional demand and increased activity among large holders, commonly known as whales. According to Eric Balchunas, Bloomberg Senior ETF Analyst, BlackRock's Bitcoin ETF (IBIT) is attracting interest from whales through in-kind swaps. The mechanism allows eligible Bitcoin holders to defer recognition of capital gains rather than selling their Bitcoin for cash before purchasing ETF shares.
The reduction of the minimum transaction size to $1 million has helped make the mechanism accessible to whales in addition to larger institutional clients. This month, BlackRock processed about $5 billion in Bitcoin-to-ETF swaps, and the company's head of digital assets, Robbie Mitchnick, said that access will continue to expand.
Institutional demand has strengthened further, with SoSoValue data showing that Bitcoin ETFs recorded $314.37 million in inflows on Tuesday. This marked the seventh consecutive day of positive inflows, bringing the total net asset value of the Bitcoin ETFs to $99.05 billion, representing approximately 6.31% of Bitcoin's total market capitalization.
Bitcoin's recent rally has also been accompanied by stronger whale activity. The cryptocurrency has gained about 23% in its latest rally, marking its strongest rise in three years and pushing BTC above the average purchase price of a large portion of the market. Santiment data shows that the percentage of Bitcoin's total supply currently in profit has increased to 69.32%, up from 60.04% on August 13 before the rally.