Bitcoin’s Price Fell Below $60,000 at the Start of the Week as Institutions Stopped Buying Stablecoins

• Institutions did not buy stablecoins over the weekend.
• BTC registered over 4% losses over a 24-hour period leading into Monday.

BTC’s price dropped to below $60,000 on Monday, causing a decline of about 4% from the day prior when it traded at $62,510. The dipping price action occurred as institutional players stopped acquiring stablecoins for two days before the week started.

Blockchain analytics firm Lookonchain posted about the occurrence, “Institutions seem to have temporarily stopped buying, and the price of $BTC dropped 4.5% today!” It added, “We noticed that institutions stopped receiving $USDT from #TetherTreasury and transferring it to exchanges 2 days ago.”

As institutions halted their stablecoin buying, an asset class that acts as the on-ramp to crypto investment, they could have also stopped interacting with BTC, causing the dip. Financial houses often receive their stablecoin supply from issuers like Tether, which is then moved to exchanges to acquire other digital assets. This, if not transpired, decreases the buying pressure on the likes of BTC.

BTC Prices Bounced Back as Tether Pumped Over a Billion Into the Market

On the contrary, Tether minted and pumped $1.3 billion worth of USDT to exchanges between August 5 and August 9, a period when BTC’s price dropped to below $50,000 and rose by 21%. Institutions resuming their stablecoin movements into exchanges could prevent BTC from falling further and push its price upward.

The largest crypto asset’s price drops cleared value out of US-based spot BTC ETFs on August 9 as the markets closed this past weekend. The ETFs collectively saw outflows of $89.73 million. However, that changed on Monday, with net inflows into ETFs adding up to $27.87 million.

BTC ETFs Observe Net Inflows on Monday

BlackRock’s iShares Bitcoin Trust (IBIT) registered $13.45 million in inflows and Grayscale’s Minit Bitcoin Trust (BTC) $7.85 million, while ARK Invest’s and 21Shares’ ARK 21Shares Bitcoin ETF (ARKB) led the group with $35.40 million. The Grayscale Bitcoin Trust (GBTC) and Bitwise Bitcoin ETF (BITB) saw net outflows. The rest did not bring in nor lose value.

BTC’s price peaked above $60,000 on Monday but could not hold. Its price started below that point on Tuesday as well but rose above it as the day unfolded.