Institutional investors appear to be buying the dip this past week. The Swiss bitcoin ETP has experienced record volume amidst the lowest bitcoin prices in a year.

The falling price of bitcoin has coincided with record volume for the recently-launched bitcoin ETP. The exchange traded product (ETP) is listed on the SIX Swiss Stock Exchange.

Based on this volume, it seems institutional investors are “buying the dip” by accumulating bitcoin when prices are low.

The bitcoin ETP is listed under the “HODL” ticker symbol. It was launched by Amun Crypto in November 2018.

Over the past week, the ETP has experienced record trading volumes. Last Thursday and Friday, for example, the fund recorded trading volumes of 53,233 shares and 62,986 shares, respectively. To put those numbers in perspective, the average volume over the previous month was around 20,000 shares per day.

Analysts are seeing a strong correlation between ETP trading volume and the declining price of cryptocurrency. As crypto prices drop, volume increases.

Financial analyst Su Zhu (@ZhuSu), for example, tweeted a breakdown of how trading volume on the HODL ETP corresponds with price:

Last Thurs and Fri we broke volume records again on the Swiss HODL ETF with 53,233 shares and 62,986 shares traded respectively. That coincided with the dip in BTC to 3.2k and ETH to near 80. The correlation between volume and price continues to be very strong at (-68%). https://t.co/Meuaa9MXCV

— Su Zhu (@zhusu) December 11, 2018

In more straightforward terms, Zhu has noticed a consistent negative correlation between price and trading volume on the HODL ETP. As the price of bitcoin falls, trading volume increases. As the price of bitcoin rises, trading volume decreases.

The bitcoin ETP consists of fully collateralized and non-interest-paying bearer debt security issued as a security and traded and redeemed within the same structure.

Although the product is often called a “bitcoin ETP”, it actually consists of several different cryptocurrencies. The fund is made of up 48% bitcoin, for example, as well as 30% XRP, and 17.6% Ethereum, with smaller shares of Bitcoin Cash and Litecoin.

It’s important to note that there’s a major difference between a bitcoin ETP and a bitcoin ETF. The launch of a bitcoin ETF is expected to kickstart a bull market – if an ETF is ever approved. An ETP, however, is different. An ETP is not subjected to the Collective Investment Schemes Act, or CISA, which means it is not supervised by FINMA.

Institutional investors might not be the only ones buying the dip. A report last week suggested that bitcoin users in Argentina and Venezuela were also accumulating bitcoin during this prolonged bear market, according to data from LocalBitcoins. Venezuela and Argentina are two countries known for their heavy bitcoin usage. In Venezuela, for example, bitcoin has become increasingly popular as the country undergoes a period of hyperinflation with its fiat currency.

Are institutional investors making a smart investment by buying the top 5 cryptocurrencies through the HODL ETP today? Or will prices continue to sink moving forward? We’ll have to wait and see.

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