Wintermute: long-term funds buy Bitcoin via OTC desks

While the Bitcoin price drops to $67K (a loss of 5.7% in 24 hours) and crypto lags behind the broader market, market maker Wintermute signals an interesting development: long-term funds are now stepping in via OTC desks. They see current levels as attractive on an eighteen-month horizon.

Bitcoin is available at Bitvavo and Bybit.

Capital flows out of crypto towards AI and small caps

According to Wintermute, one of the largest crypto market makers and OTC desks globally, crypto has failed to move in tandem with the broader rally in risky assets for two consecutive weeks. During this period, approximately $2 billion has flowed out of Bitcoin and Ethereum ETFs, while fresh capital finds its way into AI stocks and small cap companies.

The divergence is clearly visible in the chart that Wintermute shares, comparing the relative price performance of Bitcoin and the iShares Expanded Tech-Software ETF (IGV) since the start of 2024. The two tracked closely for a long time, but in recent weeks they have diverged: software stocks are surging while Bitcoin continues to decline.

OTC purchases as a signal for a bottom around $60,000 to $65,000

Yet there is also positive news in the report. Wintermute reports that long-term funds have begun buying Bitcoin in tranches via OTC desks. They consider current price levels attractive for an investment horizon of eighteen months. According to Wintermute, the main support level on the downside lies around $60,000 to $65,000.

That observation aligns with recent analyses that see Bitcoin moving towards $65,000 after breaking multiple support levels. Earlier this week, Bitcoin also dipped below $70,000 while $759 million worth of positions were liquidated. The question now is whether the entry of institutional buyers via OTC marks a bottom, or whether the downward pressure from ETF outflows and rotation into other assets persists for now.