Chris Zuehlke says institutions are buying BTC amid a retail-driven selloff

Chris Zuehlke, the Global Head of Cumberland, believes the crypto winter is here. He said this during an interview on January 25, adding that it is important to go back to when it started. Zuehlke pointed out that in January last year, Bitcoin (BTC/USD) was changing hands at around $32,000.00 (£23,678.40) compared to $37,000.00 (£27,378.15) now.

Over the past year, Ethereum (ETH/USD) was trading at $800.00 (591.96) compared to $2,500 (£1,849.88) now. Solana (SOL) also surged from $2.00 (£1.48) to approximately $96.00 (£71.02) at the time of writing. With these figures in mind, Zuehlke said January experienced great selling pressure, but it does not change that the year-over-year gains are quite impressive.

According to him, these gains indicate that the market is growing and adoption is continuing. Zuehlke acknowledged that the crypto ecosystem is acting like high-growth technology stocks. However, the beauty of crypto is that investors can look past the price process and look for on-chain analytics to explain what they see.

The first thing that Zuehlke believes investors should look at is on-exchange assets. He noted that on-exchange assets are at the lowest level in three years. Typically, retail investors hold their crypto on exchanges, meaning that if they are their lowest levels in three years, retailers have been selling their holdings.

On the other side, looking at the on-chain analytics for long-term HODLers, approximately 80% of BTC falls in wallets are commonly associated with institutional investors. This means that although retail investors have been cashing out, institutional investors have been increasingly purchasing and accumulating BTC.

Institutions will drive BTC’s rally this year

This news comes after several experts, including Real Vision CEO Raoul Pal, predicted that institutional investors will drive this year’s crypto rally. According to Pal, most institutions sold their assets in December to take profits. However, he believes that the same institutions will inject funds into crypto this year, pushing prices higher.

Matt Maley, the Managing Director and Equity Strategist at Miller Tabak, believes some institutions incurred losses after embracing crypto as coins approached their all-time highs. He added that institutional investors get rid of losing assets and push up winners, especially if the losers have large weightings in their portfolios.

However, most companies had only invested a small part of their portfolios in crypto. To this end, Maley believes most of them will come back into the market and take a serious look at it, unlike they did last year.

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