The cryptocurrency exchange market appears to have undergone a transformative change in 2024, largely driven by a significant increase in institutional activity.
According to information shared by CryptoQuant on its QuickTake platform, major exchanges are experiencing unprecedented growth in Bitcoin and USDT deposits.
This trend highlights institutional investors’ growing confidence in digital assets, marking a break from the traditionally retail-dominated trading space.
The rise of institutional interest in crypto
Key indicators reveal that average Bitcoin deposits on exchanges increased from 0.36 BTC in 2023 to 1.65 BTC this year. Likewise, USDT deposits increased significantly from $19.6k to $230k, reflecting the growing involvement of professional and corporate investors.
According to CryptoQuant, these large inflows signify increased interest in digital currencies and broader institutional adoption as a viable financial instrument.
The on-chain data provider platform also revealed that Binance has become the leader in attracting institutional funds among cryptocurrency exchanges.
Data from CryptoQuant highlights a 2.77 BTC increase in Binance’s average daily Bitcoin deposits, far outpacing competitors like Kraken and Coinbase, which reported increases of 0.56 BTC and 0.41 BTC, respectively.
This is in line with the Binance CEO’s earlier statement regarding a 40% expansion of the platform’s institutional business. In an interview with CNBC, Binance CEO Richard Teng noted:
We are therefore seeing a strong increase in the number of institutional and corporate investors. We saw a 40% increase in integrations in this category in this year alone.
Binance’s performance is further aided by its activity in USDT deposits. The exchange and Bitfinex saw substantial gains in this category, with Binance’s average daily USDT deposit increasing by $94,000 and Bitfinex’s by $566,000, according to data shared by CryptoQuant.
Notably, Binance’s total USDT reserves reached an all-time high of $23 billion (ERC-20), highlighting its dominance in institutional liquidity. On November 3, 2024, Binance set a record with an average daily Bitcoin deposit of 6.85 BTC (approximately $465,000), a 14-fold increase in dollar terms from previous levels.
More room for an institutional push?
Despite this significant increase in institutional interest in the overall cryptocurrency market, it may only be the beginning, especially since not even 50% of large traditional companies have ventured into the cryptocurrency market.
Highlighting this, Binance CEO Teng told CNBC:
Institutions’ allocation to crypto is just the tip of the iceberg. This is just beginning as many of them are still doing their due diligence.
It should be noted that the implication of the continued rise in institutional interest in digital currency is very positive. Continuing this trend means more inflows and liquidity into the market, which could drive up cryptocurrency prices, given that several major purchases would be made.
Featured image created with DALL-E, chart from TradingView
