People are wrong about the "institutional money" narrative

[LucidTA]

People are largely misinterpreting the impact that institutional money is having/will have on the market. In the near-mid term, the most significant effect will be in people speculating on the prospect of institutional money and not the institutional money itself.

In any case, once institutional money does start to enter the market, people misinterpret the effect it will have on prices. Institutions wont be bidding on top of each other on public exchanges, pushing the price up to ATH and beyond. The effect will largely be in pulling liquidity from the back end. This means purchasing large sums from miners and OTC desks (OTC desks will soon have to aggregate bids across exchanges).

The effect that this has on the market is for one; to constrain selling pressure. This is quite obvious in that institutional demand should consume 100% of mined BTC that otherwise would be dumped on exchanges. The other impact is in exerting general upward pressure, as well as reducing the extent to which BTC can capitulate. When OTC desks aggregate bids on exchanges, they do not bid blindly into hollow order books, they buy into pullbacks where large sums can be purchased without significant slippage. (As previously mentioned), this exerts general upward pressure on prices and reduces the extent to which BTC can dump.

The role of institutional money is likely to be enormous; but don't buy the narrative. In the near term, the main effect of institutional money will be retailers speculating on the prospect of institutional money. The whims of retail investors are still the primary catalyst for price movements; and the current psychological/speculative environment is still not one in which we are likely to see building momentum (acceleration in entrance of new capital). Without this momentum of retail capital, the dynamic is likely to continue as it has been for some time. Traders continually try to pick bottoms, news traders buy into news narratives, weak hands watch markets warily > bad news comes out (be it minor) > weak hands dump, since the bid is weak; lows are broken, technical traders are stopped out, we get capitulation before further weak rallies. The key thing to be aware of is that price pumps are largely just existing investors moving money around, not an influx of new capital. In any case; I'm digressing from the point of this thread so I'll end it here.

Discussion is welcome. I've been in the space for quite some time though have only just begun posting content online, check out @LucidTA to hear more from me.