Bitwise CIO Matt Hougan and Nate Geraci, the president of NovaDius Wealth Management, have led calls for calm as panicky voices have become louder with each crypto price drawdown. Whale wallet accumulation trends and positive funding rates in the US have also begun to appear as the proverbial light at the end of the tunnel, backing up the optimism among stakeholders. 

Onchain data spotted by Santiment points to the growth in the population of Bitcoin wallets holding at least 100 tokens, worth about $6.6 million at current prices, nearing a record level above 20,000.

According to the analytics firms, this kind of activity among this cohort, which typically represents high-net-worth individuals, funds, long-term holders, or institutions, “during or after price declines” is a “bullish signal.” 

CoinGlass data also shows a rare return into positive territory in the Coinbase premium rate after over 40 days in the red. The Coinbase Bitcoin Premium Index measures the difference between the price of Bitcoin on Coinbase, the largest venue for digital asset trading in the US against and the global market average.

When this metric turns positive, it typically means optimistic investor sentiment reflected in strong buying pressure from traders and institutional or compliant funds based in the US. 

Expect crypto spring after crypto winter, Matt Hougan 

Matt Hougan took aim at conspiracy theorists, who have gotten rather creative at fingering the root cause of Bitcoin’s problems since the now infamous “1011” crash, when about $19 billion of liquidity was cleared from the market, per reports. 

According to the Bitwise executive, “The real reason bitcoin is down is that a bunch of people who were long Bitcoin sold their Bitcoin exposure. They sold it via spot, they sold it by unwinding leveraged positions, and they sold it by writing calls against their bitcoin.”

In the same post, he dismissed attempts to put all the blame at the doorstep of Binance, Wintermute, obscure offshore macro hedge funds, or even Jane Street. 

The far more boring reality, according to Hougan, is that “sold because of the four-year cycle and because of quantum fears and because they wanted to invest in AI start-ups and for other reasons.”

Even then, Hougan expects a “classic crypto spring” once this “classic crypto winter” passes. 

When will the crypto winter pass?

Nate Geraci pointed to $55 billion in inflows into spot Bitcoin ETFs since they were approved in January 2024, compared to about $6.5 billion in outflows since October, as signs that confidence never wavered among ETF buyers. 

US-listed spot BTC ETFs pulled in more than $1 billion in inflows in three days, from February 24 to 26, according to SoSoValue data, breaking a miserable eight-day run where two days of small positive funding punctuated large outflow days.

CoinGlass data also shows the Coinbase Bitcoin Premium Index remaining in the positive territory for the first time this month, further giving legs to the theory that the US may be done selling. 

According to Hougan, this means “We will set new all-time highs in the future.”

Senior Bloomberg ETF analyst Eric Balchunas agreed with Geraci’s confidence of a recovery to match BTC’s latest 50% drawdown. 

“As an ETF watcher, you know just how absurd this strength amid a 50% drawdown. This is the real story, vs focusing on the $6b that came out, which most stories do. Further, the narrative that crypto is ‘paying the price’ for getting financialized is absurd. $55b in net net new cash in two years is the opposite of paying the price.”

However, it is not plain sailing from here though. According to Santiment, despite the growing accumulation among the 100 BTC wallet cohort, the lack of commensurate increase in the percentage of supply by key stakeholders explains why prices have not reflected the growth just yet. 

Bitcoin is trading just above $66,000 at the time of this report, down from its latest attempt to breach the $70,000 wall yesterday, February 27.

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