• The daily trading volume of Bitcoin, Ethereum, Litecoin and Bitcoin Cash on the PayPal-affiliated exchange itBit set a historical record yesterday.
• The world’s largest crypto asset management firm Grayscale reopens the Bitcoin Trust to new investors.

Bitcoin (BTC) seems to be consolidating in the mid-30,000s after the price suffered its biggest drop ever in absolute terms yesterday. Despite the collapse in market prices, data from various sectors show that major records were broken by investors trading bitcoin.

On the exchange itBit, about $240 million was traded during the bitcoin price collapse, according to data from the Nomics platform. The exchange is PayPal’s partner for the purchase of Bitcoin, Litecoin, Ethereum, and Bitcoin Cash on its platform.

PayPal made the purchase of the aforementioned cryptocurrencies available to U.S. customers in late October 2020. Users can buy these cryptocurrencies and hold them in their accounts. Although users are not yet allowed to conduct other transactions, PayPal secures the funds with the “real assets” its users purchase at a 1:1 ratio, according to the Bit license granted to the payment processor by the state of New York.

Accordingly, itBit’s daily trading volume has become an important metric to gauge retail investor participation and mainstream interest in the crypto market. As the chart below shows, itBit’s daily volume has skyrocketed since it partnered with PayPal and experienced significant growth in January 2021.

Additional data indicates that 63% of the market volume is dominated by the BTC/USD pair, followed by ETH/USD with 37%. Furthermore, data published by Glassnode records a high number of addresses with over 1,000 BTC. Therefore, the recovery in the price of cryptocurrency seems to be sustained by the buying pressure made by PayPal and other Bitcoin whales, as stated by researcher Elias Simons:

(BTC accumulation) continue to grow at the expense of everyone else, even as this recent drop is taking effect. While you were selling, the whales were swallowing your Bitcoin…

Grayscale reopens the Bitcoin Trust to new investors

Another bullish sign could be that Grayscale reopened its Grayscale’s Bitcoin Trust (GBTC) after a 3-week break, to new investors. They will be able to acquire one share of Grayscale’s product for a market price per share of $37.39 or 0.00094955 BTC per share at an annualized fee of 2%.

The premium for investing in Grayscale’s bitcoin fund is currently 15.64% above the bitcoin price, having fallen from the 33% it had on January 6 this year. This premium comes as a result of the high demand for GBTC.

However, yesterday’s crash did not leave Grayscale unscathed. As a result, the total assets under management (AUM) fell to $24.5 billion, which is a loss of $3.9 billion from the previous day. Still, Grayscale’s products are considered one of the market drivers for Bitcoin. As the chart below shows, GBTC has boomed in recent months and has become a key factor in Bitcoin’s bull run.

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