The research, which looked from January to the beginning of August 2020 at on-chain BTC transaction data, found retail investors largely pulled back and took a wait and see strategy with Bitcoin. In contrast, BTC had accumulated larger, possibly more institutional investors. Transactions in the bulk of August and September when prices fell are not taken into account in the report.
Retail transactions, those that represent less than one-tenth of a coin, make up the bulk of BTC movement and track price fluctuations more closely. These investors tend to be “shaken out of the market more easily in times of high volatility and dramatic declines in prices,” the report noted, which is exactly what the researchers found.
Based on the data, retail transactions “decreased and deviated from the price trend. Suggesting retail investors were taking a wait-and-see approach as BTC a season-long period of post-crash accumulation” about May.
At the onset of the pandemic, medium transactions attributed to miners and bigger retail players were more cautious. But this behavior appeared to only last until June when activity picked up again.
It gets interesting when the data move to track transactions over 1,000 BTC. As BTC approached $10,000, the number of transactions between BTC 1,000. And BTC 5,000 continued to rise from the end of June even as the price started to consolidate.
“This upward trend suggests the possibility that institutions and/or large players got busy accumulating BTC as economic stimulus measures from central banks spurred on the purchase of hard assets. However, because we cannot cleanly differentiate what actual activity took place from the number of transactions alone, this only remains a speculative possibility,” the report noted.
Transactions of 5,000 BTC and upward also saw spikes from mid-May to mid-July. Which led the researchers to two possible conclusions. Cryptocurrency exchanges may have shifted coins in different wallets for different reasons. Most likely security or large institutional investors entered the market and accumulated BTC in anticipation of rising or falling prices. The report noted the impact COVID-19 could have caused big investors to turn to BTC. As a hedge against fiat inflation on the global markets.
OKEx’s report showed how people moved within the market during the first few months of the pandemic. Especially as retail investors pulled back to expect prices to return to normal again. On the other hand, large investors “bought the dip,” and started accumulating BTC.