Bitcoin and Ethereum Poised to Rally on Increased Demand: CryptoQuant
The increased demand for Bitcoin and Ethereum has caused the value of the cryptocurrencies to go up, according to data provider CryptoQuant. The weekly report showed that the demand for Bitcoin increased due to accumulation from large investors (whales) and permanent holders.
Long-time Bitcoin holders accumulated approximately 70,000 Bitcoins in May, a significant surge that marked the largest increase since late April. Meanwhile, Bitcoin demand from whale investors is growing at a rate of 4.4% each month, the fastest since April 20.
CryptoQuant reports that whale investors and permanent holders drive up Bitcoin demand, fueling the recent surge. “Accelerating demand from these cohorts of Bitcoin holders is highly correlated with price,” the report added.
Confirming the report, Bitcoin sold for $63k-$64k on April 20, a day after the halving event. However, as of press time, Bitcoin was trading at $71,000.
Bitcoin ETF Leads to Demand Surge
Another catalyst for the surge in Bitcoin demand is the introduction of the Bitcoin spot ETF. The report stated, “Additionally, the recovery in Bitcoin demand is evident in an increase in the purchase of coins from spot ETFs in the USA. The total holdings of spot ETFs in the USA have grown from 819K on May 1st to 859 K. The purchases of Bitcoin from ETFs have been a meaningful source of demand so far this year.”
Our team recently reported that Bitcoin Whales, or Bitcoin addresses with over 1k BTC holdings, increased their holdings by 250k BTC after the launch of Bitcoin ETFs.
Ethereum ETF Leads to Demand Surge
Ethereum was not left out in the increased demand. The United States SEC accepted the applications from Nasdaq, CBOE, and NYSE to approve Ethereum spot ETF on May 23, giving US crypto investors the freedom to “list and trade shares of ether-based exchange traded-products.”
The CryptoQuant report showed that ETH demand also increased after the launch of spot ETH ETFs in the USA. Daily ETH buys from long-time investors increased from an average of 5K ETH before the launch to 40K ETH after the launch.
In addition, the total holdings of whale ETH addresses increased from 15.4M before the ETF launch to 16M after.