Institutional demand for Bitcoin is accelerating sharply, with fresh market data suggesting a potential rally within the next week. According to Capriole Investments founder Charles Edwards, institutions accounted for 75% of Coinbase’s trading volume on Tuesday, a level historically followed by higher Bitcoin prices in the days ahead.
Institutional Demand Hits Key Threshold
Data from Capriole shows that institutional buying has surged, with 75% of Coinbase’s total trading volume driven by large players on Tuesday. Historically, every instance of this metric crossing the 75% threshold has been followed by Bitcoin price gains within seven days.
Capriole’s analysis further revealed that institutional “excess demand” this week was six times greater than the 450 BTC mined daily, equating to around 2,700 BTC in net institutional demand. Corporate treasuries were major contributors, adding 810 BTC on Tuesday alone. On Monday, purchases were even stronger, with nearly 3,000 BTC accumulated.
“This level of accumulation far exceeds Bitcoin’s daily issuance, creating a clear bullish supply-demand imbalance,” Edwards noted.
Macro Tailwinds: Fed Rate Cuts in Sight
The surge in institutional interest came shortly after the release of the latest US Consumer Price Index (CPI) data for July, which showed inflation matching expectations. Markets interpreted the result as confirmation that the Federal Reserve will cut interest rates next month.
Edwards pointed out that this rate outlook is a key driver for risk assets like Bitcoin.
“Because yesterday inflation was as expected, it’s now a certainty the Fed will cut rates next month, and probably three times this year,” he said. “Markets are even considering a larger 0.5% cut given the weak jobs backdrop. Rates down = risk assets up, and Bitcoin has historically been the fastest horse.”
Lower interest rates reduce the appeal of cash and bonds, pushing institutional capital toward higher-risk, higher-reward assets with Bitcoin often a preferred option.
Market Positioning and Fed Expectations
Latest figures from CME Group’s FedWatch Tool show markets overwhelmingly pricing in a 0.25% cut in September. Trading firm QCP Capital noted that market-implied cuts for 2025 remain unchanged, reflecting expectations for around 60 basis points of easing.
“The terminal rate has also held steady, despite a softer labour market and expectations for a more dovish Fed Chair in 2026,” QCP said in its Asia Colour market note. “Futures positioning suggests investors see 3% as the Fed’s floor in 2026.”
With interest rates projected to trend lower over the medium term, Bitcoin stands to benefit from continued institutional reallocation into digital assets.
Eyes on Jackson Hole for Next Signals
Attention now turns to next week’s Jackson Hole Economic Symposium, where Federal Reserve officials are expected to provide further clarity on monetary policy. Any confirmation of aggressive rate cuts could add further momentum to Bitcoin’s current institutional-led rally.
The combination of strong institutional inflows, favourable macroeconomic signals, and historical correlations between high institutional volumes and price gains suggest that Bitcoin may be poised for a breakout in the near term.
As Edwards summed up: “Every time we’ve seen this level of institutional dominance on Coinbase, Bitcoin has moved higher within a week. This time, the macro backdrop makes the signal even stronger.”
