Wall Street liquidity radar: Institutional Bitcoin trading jumps 61.9%, but US demand still lags

US institutional Bitcoin trading surged, but spot prices remained below overseas levels. The divergence between institutional activity and buying pressure points to continued caution.

Bitcoin trading through an institutional venue rose sharply. However, the US spot market still showed no clear buying advantage over offshore markets.

The Coinbase premium stood at -0.135% on October 20. The daily reading improved from -0.1416% on October 16 to -0.1229% on October 19 before weakening again.

A negative premium means Bitcoin trades at a lower price on Coinbase than on overseas markets. The discount indicates that US buying pressure is not stronger than demand abroad.

Coinbase Prime Bitcoin volume reached 4,792.89 BTC on October 19, up 61.9% from 2,960.04 BTC the previous day. Its 24-hour volume was about $385.79 million.

Prime volume reflects trades executed through an institutional venue. The increase shows a clear rise in institutional activity, though volume alone does not indicate whether buying or selling dominated.

CME Bitcoin futures positioning among leveraged funds stood at 5,520 long contracts and 11,364 short contracts as of October 13, according to the CFTC's weekly disclosure. Shorts were about 2.1 times the size of longs, maintaining a downside bias.

The VIX rose to 18.67 on October 20 from 18.44 the previous day, an increase of 0.23 points, or 1.25%. It remained below 20 but close enough to that threshold to signal lingering volatility risk.

The US Dollar Index slipped to 101.89 on October 20 from 101.98 the previous day. The US 10-year Treasury yield stood at 5.09% as of October 16. A softer dollar may ease pressure on risk assets, while elevated yields remain a headwind.

Overall, the US market remains cautious: institutional trading increased, but a spot buying advantage has yet to emerge. Whether the Coinbase premium turns positive and the higher Prime volume persists will be key indicators.

[Editor's note] Wall Street Liquidity Radar tracks how US investors view Bitcoin through four indicators: CME leveraged-fund positioning, the Coinbase premium, the VIX and Coinbase Prime trading volume. Together, they provide a snapshot of short-term market direction and broader investor sentiment.

This article is based on market data and analysis and does not constitute investment advice.