Bitcoin and Ethereum Rally as Institutions Reportedly Buy the Dip

Crypto markets rallied on Wednesday as investors continued to snap up discounted digital assets.

Ethereum (ETH) rose 1% to $2,500, while Bitcoin (BTC) climbed 2% to $56,822 and Polkadot (DOT) increased 3%. Solana continues to outperform, with an 11% gain on the day.

On-chain analyst Lookonchain reports that institutional investors are taking advantage of lower prices. Cumberland, a crypto trading firm, received $95 million in USDT from the Tether Treasury and moved it into Coinbase, Kraken, OKX, and Forwarder. Since October 20, 2023, Cumberland has injected $6.28 billion worth of USDT into the market.

“Institutions have begun to inject funds into the crypto market and buy the dip!” Lookonchain tweeted.

Data from CryptoQuant indicates that over 400,000 Bitcoins worth $23 billion have been transferred to permanent holder addresses in the last 30 days. According to CryptoQuant, these are entities that accumulate Bitcoin over time and never sell.

“Within a year, some entities — whether they're TradFi institutions, companies, governments, or others — will announce that they've acquired Bitcoin in Q3 2024,” CryptoQuant CEO Ki Young Ju tweeted. “And retail investors will regret not buying it because they were worried about the German govt selling, Mt. Gox, or whatever macroeconomic sh*t was going on.”

According to Santiment, an on-chain analytics firm, social media played a big role in Bitcoin's quick bounce back to $57,000 amid speculation that it could drop to $45,000 or lower.

SOL/ETH Ratio Hits All-time High

On Wednesday, Solana (SOL) surged 11% to $153. As a result, the SOL/ETH ratio hit a new all-time high.

The Solana to Ether ratio reached a record high of 0.060, according to TradingView data. To put it in simpler terms, this ratio means that 1 SOL is now worth 0.06 ETH. For context, the SOL/ETH ratio previously hit a high of 0.058 in November 2021.

In essence, this means that Solana is gaining value relative to Ethereum, which can be an indicator of increased investor confidence in Solana compared to Ethereum.

Ethereum ETFs Record Positive Inflows

Despite a rough week for risk-on assets, including cryptocurrencies, the recently launched spot Ethereum ETFs managed to attract positive inflows on Monday.

On Monday, ETH ETFs recorded $48.8 million in net inflows, and on Tuesday, there were $98.4 million in inflows. The majority of these inflows came from BlackRock’s ETHA and Fidelity’s FETH, according to Farside Investors Data.

Meanwhile, Grayscale’s ETHE ETF continued to bleed, with total outflows amounting to $85 million over the week.

Stock Market Futures Rise

U.S. stock futures were up on Wednesday. S&P 500 futures rose 1%, Nasdaq 100 futures climbed 2%, and Dow Jones Industrial Average futures increased by 0.7%.

Bank of Japan’s deputy governor Uchida Shinichi said in a Wednesday speech that the central bank won't raise rates amid market volatility. This week, Japanese markets have experienced both their worst crash since Black Monday in 1987 and their best day since October 2008.

“Japan’s economy is not in a situation where the Bank may fall behind the curve if it does not raise the policy interest rate at a certain pace,” Uchida noted. “Therefore, the Bank will not raise its policy interest rate when financial and capital markets are unstable.”