Wintermute sees trading volume boom as investor ‘dry powder’ piles up

Wintermute sees trading volume boom as investor ‘dry powder’ piles up
Investors are buying crypto pullbacks, a trend market maker Wintermute says will continue. Credit: Shutterstock / Thongden Studio
  • Traders will continue to eat up drops in crypto prices into 2024, according to Wintermute.
  • Less aggressive volumes in the market are a sign investors still have “dry powder” to spend, the firm said.
  • Bitcoin’s rally has continued as a new spot Bitcoin ETF hit the market.

Traders have been buying dips in 2024, a trend Wintermute said “is likely to remain strong” in a Wednesday note.

Money remains to be invested

Wintermute wrote that volumes haven’t returned to previous levels, which means money, or “dry powder,” remains to be invested.

Market sentiment will take three to six months to taper off, Wintermute wrote, before investors look to protect themselves against market crashes, a tactic the firm says “remains absent” from the general crypto market.

Spot Bitcoin exchange-traded funds saw outflows last week but resumed their pattern of record-breaking growth. On Wednesday, inflows reached $243 million, according to BitMEX Research.

Stay ahead of the game with our weekly newsletters

Since their January 10 approval, the 10 spot Bitcoin ETFs have seen close to $12 billion in inflows.

On Tuesday, Hashdex converted its futures product into a spot one to become the 11th spot Bitcoin ETF in the US.

Wintermute attributed the previous few days’ outflows to price drops last week, as Bitcoin fell around 15% from all-time highs to $61,500.

“Dip buyers” remain active, wrote Wintermute — a theme it says is likely to continue for several months.

Join the community to get our latest stories and updates

Bitcoin has pushed back to around $71,300 from last week’s lows.

As Bitcoin hovers near its all-time high, the April halving event lies ahead. Halving events, which are programmed to happen roughly every four years, reduce the amount of new Bitcoin on the market.

Bitcoin’s supply drops with each halving and with the drop comes heightened volatility — and the chance of a dramatic rise in price. Each of the previous three halvings saw varying degrees of upward price movement, but it remains to be seen whether April’s is priced in.

Crypto market movers

  • Bitcoin rose 2.7% to trade at $71,300 on Thursday.
  • Ethereum followed with a 2% gain, as it changed hands for around $3,600.

What we’re reading