The Coinbase Premium Index (CPI), a leading indicator of U.S. investor sentiment, was positive for the first time ever on January 7, 2025, at the same time Bitcoin price broke through the $102,000 level.
The CPI is the difference in the trading price of Bitcoin on Coinbase vs. other major exchanges. The CPI of Bitcoin on Coinbase is positive, which means that Bitcoin is trading at a premium on Coinbase. It shows very strong buying interest from U.S.-based investors, especially institutions and people dealing with ETFs. On the flip side, a negative CPI indicates fewer U.S. market demand or selling pressure.
Coinbase Sees 4,012 BTC Institutional Outflow Activity
Analysts say the trend is a big signal of growing U.S. investor confidence, pointing to growing institutional interest. Burak Kesmeci, an analyst at CryptoQuant, highlighted a notable outflow of 4,012 BTC from Coinbase at 18:04 local time. They are typically interpreted as institutional investors taking their holdings from personal wallets to long-term storage, a sign of confidence in Bitcoin’s future value.
This is also in line with the Bitcoin price rally, cementing yet again the US market’s relevance in shaping global Bitcoin trends. Analysts, however, suggest the CPI is back into positive territory, and other measurements such as open interest and onchain data indicate Bitcoin will be bullish in 2025.
The spot market is showing clear bullish momentum, but the derivatives market is less bullish. Glassnode data shows perpetual funding rates to be hovering slightly below the neutral threshold of 0.01% at 0.009%. It is a diminution from mid-December’s high of 0.026%, implying a decreasing propensity among traders to pay fees for leveraged long positions.
The divergence highlights a split in market behavior: speculative appetite in futures markets is still muted while spot market activity is driven by U.S. investors.
A return to positive territory for the Coinbase Premium Index shows U.S. investor confidence in Bitcoin rising. Overcautious patterns in the derivatives market show what a complicated interplay between facts and economics can be. Bitcoin’s price surge appears to be driven by institutional demand, but speculative traders are still wary of high-risk positions as a still cautious market digests the news.
