Significant amounts of Bitcoin (BTC) have been flowing out of crypto exchange Coinbase lately, and this could be a strong, bullish signal according to crypto data firm CryptoQuant’s CEO Ki Young Ju today. 

According to CryptoQuant’s data, just yesterday over 15,200 BTC—worth nearly $500 million—flowed out from Coinbase Pro. This was likely due to huge over-the-counter (OTC) trades made by institutional players, Ju asserted.

“[Bitcoin] went to custody wallets that only have in-going transactions. It’s likely to be OTC deals from institutional investors,” he tweeted, adding, “I believe this is the strongest bullish signal.”

Over 15,200 Bitcoin transferred from Coinbase Pro
Over 15,200 Bitcoin transferred from Coinbase Pro. Image: CryptoQuant

According to Ju, this outflow of Bitcoin was moved in transactions ranging from around 1,100 BTC ($35 million) to 4,400 BTC ($150 million). While this could have been transactions between different wallets held by the exchange, there is usually no reason to split large wallets into smaller ones. Additionally, Coinbase’s custody service is integrated with its OTC desks, which further points towards OTC activity, Ju added.

While institutional traders use OTC desks when they want to buy or sell large amounts of an asset without sending some ripples across the market, these purchases can still affect Bitcoin’s price. This is because markets have a tendency to balance themselves out, so when the supply of something is reduced—and demand from retail investors stays the same—OTC deals could lead to an upward price momentum anyway, albeit a delayed one.

As Decrypt reported, large institutional companies are steadily buying more Bitcoin lately. Grayscale alone holds around $23 billion in its Bitcoin Trust, for example, while BlockFi has recently submitted its registration form for a similar trust. So while the price may have retraced from its Elon Musk-fuelled high, demand is going through the roof.

Source: decrypt