Is the Party Over? Data Shows Americans Are Now Buying Less BTC and ETH

Blockchain analytics platform CryptoQuant disclosed in its latest weekly report that American investors have reduced the rate at which they accumulate bitcoin (BTC) and Ether (ETH).

This “noticeable slowdown in US investor demand” reflects on the spot and derivatives markets across crypto exchanges and the exchange-traded funds (ETFs) market. It suggests that U.S. investors are awaiting new catalysts to propel the crypto market to higher levels before they re-engage.

The CryptoQuant analysis highlighted three metrics indicating a decline in enthusiasm among U.S. retail and institutional investors. It tracked the recent ETF inflow, spot demand within exchanges, and investors’ behavior towards the futures market.

ETFs Record Lesser Inflows

Earlier this month, BTC reached an all-time high (ATH) of over $126,000. This rubbed off on the Bitcoin ETF market, as it recorded massive inflows at the time. It even saw $1.21 billion in daily flow on the same day as the bitcoin price surge.

However, since then, there have been more frequent outflows than inflows. CryptoQuant noted in its analysis that the Bitcoin ETF market has seen an average outflow of 281 BTC in a seven-day duration, representing one of the lowest since April.

The Ethereum ecosystem, on the other hand, has seen even more outflow records from ETFs than its Bitcoin counterpart. After reaching a price ATH above $4,900 in August, spot Ethereum ETFs saw a considerably high inflow record. Ethereum ETF inflows have nearly stalled since August, particularly with Ether’s price now around $3,800. This indicates that investors have reduced their cash influx into the second-leading cryptocurrency.

Reduced Spot Demand in Exchanges

CryptoQuant’s data revealed that “the Coinbase premium for both Bitcoin and Ethereum has approached zero, showing a slowdown in US spot demand.” This would be the first time the metric has hit zero since September 8th.

For context, the Coinbase premium refers to the price difference between Coinbase’s USD price for a cryptocurrency and Binance’s USDT value for the same asset. For instance, the price gap between Coinbase’s BTC/USD pair and Binance’s BTC/USDT pair.

This metric is often used to monitor the movement of institutional whales within the crypto industry. This means that whenever Coinbase premium’s value is high, investors are accumulating the underlying digital asset.

The fact that the Coinbase premium is at zero indicates a “reduced domestic buying pressure” from investors.

Futures Market Sees a Decline

Regulated futures trading marketplaces, such as the Chicago Mercantile Exchange (CME) Group, have recorded considerably lower investor demand for Bitcoin and Ethereum futures contracts. CryptoQuant deduced this based on the CME futures annualized basis. This metric shows the difference between the futures contract’s price and the spot value of a particular digital asset. Whenever the value drops, it means that the demand to hold futures contracts for that asset has declined.

Current data indicates that the CME futures annualized basis for Bitcoin contracts expiring in six months has dropped below 2%. This is the lowest level the market has seen since June 2023. Its Ethereum counterpart is presently at 3%, representing the lowest since July 29th. These figures indicate a reduced demand for leveraged exposure to the centralized futures market.

Meanwhile, it is crucial not to overlook the fact that the decentralized perpetual futures market has experienced a remarkable surge over the past few weeks. According to DefiLlama, the market currently boasts over $57 billion in traded volume. This suggests that some American investors are diverting attention to the decentralized perps ecosystem. This could be a result of increased leverage, added incentives, and lower fees.

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