Institutional Demand for Ripple is Growing

Bitcoin and the major altcoins extended their recovery on Saturday, as the cryptocurrency market approached multi-month highs on improved investor sentiment.

Cryptocurrency Market Extends Rally

Cryptocurrencies added more than $17 billion in market cap on Saturday, bringing their total value to $430.8 billion. That’s roughly $7 billion shy of the Tuesday peak.

Bitcoin prices peaked at $9,423, their highest since Tuesday. At the time of writing, BTC/USD was trading at $9,270 for a gain of 3.2% and a market cap of $158 billion.

Despite the gain, bitcoin’s share of the total market drifted lower to 37.1%. The cryptocurrency accounted for more than 45% of the total market at the start of April.

Altcoins added more than $9 billion to their market cap on Saturday, with Cardano and EOS leading the rally. Each currency posted double-digit gains, with Cardano overtaking Litecoin in market cap.

EOS gained 12.5% to $19.02. Cardano jumped 13.7% to $0.342.

Ethereum rose 1.4% to $684. Ripple XRP added 2.3% to $0.866.

Institutional Demand

Demand for cryptocurrency may have broadened to institutional circles as well, with CBOE reporting its highest-ever bitcoin futures volumes earlier this week. According to Kevin Davitt, an instructor at the CBOE Options Institute, trading volumes for XBT Bitcoin Futures were nearly three times higher than normal on Wednesday.

Since launching its futures contract back in December, CBOE has averaged roughly 6,600 contracts daily. On Wednesday, that number jumped to 18,210 for the May contract. The previous high was set on Jan. 17 when less than 15,500 contracts traded. However, unlike in January, the recent spike wasn’t associated with the expiry of the first futures contract.

Davitt indicated that the recent spike in volumes may be associated with a rise in institutional trading, although more data would need to be collected to determine if this is the case. However, he did note overall bullish sentiment in XBT.

CBOE is looking to expand institutional access to cryptocurrency by launching the very first bitcoin exchange-traded fund (ETF). However, doing so would require convincing the U.S. Securities and Exchange Commission (SEC) to change an important rule that would allow for bitcoin ETFs to materialize.

In a document that surfaced earlier this month, the SEC indicated that it had initiated formal proceedings on the matter. Until now, no fund issuer has succeeded in convincing the regulator to list their bitcoin ETF. However, the decision to hold formal proceedings seems to have followed from the CBOE’s intent to pursue an ETF listing tied to bitcoin futures.

The percentage of crypto trades ‘in the buy’ has declined significantly over the past week, although bullish positions remain the overwhelming majority. As of Apr. 26, more than 67% of transactions were buy orders, according to data provider TurtleBC. That figure spiked near 93% on Apr. 19. However, given the two-day lag time in the data, there’s strong reason to believe that the percentage has increased heading into the weekend.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Crypto Destroyer

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