The Iran war and rising oil prices shook global stock markets this month. However, bitcoin It barely budged, as large traders, institutional flows and sizable portfolio holders stepped in during the dips, keeping demand strong even as traditional markets faltered.
Major oil benchmarks Brent and WTI are up 30% this month, trading above $100 a barrel early Monday. The huge rise has weighed heavily on Asian stock markets and also caused downward volatility in Asian and European stocks.
Bitcoin, however, is up almost 4% to $70,200 this month, according to data from CoinDesk. The market has been buoyed by large traders acquiring BTC in the over-the-counter (OTC) market in a privately negotiated deal, according to Paul Howard, senior director at high-frequency trading firm and liquidity provider Wincent.
“Demand has been driven by some great over-the-counter products [OTC] exchanges, positioning for a quick end to the conflict in Iran, and also the acquisition of MSTR. The timing of this, with geopolitical events, may be an indicator of confidence returning to risk assets,” Howard said in an email to CoinDesk.
OTC desks are private trading venues where buyers and sellers can execute large cryptocurrency transactions without going through public exchanges. Instead of placing orders on open order books, trades are negotiated directly between the parties or facilitated by a broker. Large traders and institutions often operate in the over-the-counter market to avoid influencing the spot market price.
Howard also highlighted renewed investor interest in the popular “carry trade,” where traders sell strategy (bearish bet) shares (MSTR) while buying bitcoin ETFs at the same time. The strategy benefits if BTC rises faster than MSTR falls, allowing traders to hedge risk while profiting from bitcoin movements.
Speaking of ETFs, the 11 US-listed funds have seen net inflows of more than $700 million this month, according to data source SoSoValue. That’s a sign of renewed institutional appetite for cryptocurrency.
“Institutional flows have also turned favorable. Bitcoin spot exchange-traded funds have seen net inflows of around $1.7 billion since the end of February. This reversed a streak of outflows that lasted about four months. For the period March 8-10, the flows contributed to a weekly net inflow of around $568 million,” said Vikram Subburaj, CEO of India-based exchange Giottus.
Meanwhile, Nexo pointed to Strategy’s continued bitcoin accumulation as a major bullish factor. The Nasdaq-listed company purchased 17,994 BTC between March 2 and March 8, increasing its total holdings to 738,731 BTC.
The latest purchase matches several days’ worth of new bitcoins entering the market.
“The network has now surpassed 20 million BTC mined, leaving less than 1 million coins to be issued. At approximately 450 BTC per day, incremental supply remains limited. The strategy added 17,994 BTC, equivalent to approximately five weeks of issuance, bringing its holdings to approximately 3.7% of circulating supply,” Nexo analyst Iliya Kalchev told CoinDesk.
Demand was also channeled through bullish on-chain activity.
“Larger wallets with more than 1,000 BTC added about 0.3% to their balances during the recent declines. This points to prudent accumulation during periods of weakness,” said Vikram Subburaj.
He added that more than 400,000 BTC recently changed hands between $60,000 and $70,000.
