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Institutional Demand for Bitcoin Drops as Digital Asset Treasury Buying Slows

Institutional Bitcoin buying is falling fast as treasury companies buy less and spot ETFs keep seeing outflows. What does that mean for the market recovery?

By Zenz van der Wielen
• 1 min read
Institutional Demand for Bitcoin Drops as Digital Asset Treasury Buying Slows

Key Takeaways

  • Institutional Bitcoin buying has dropped sharply, helping push the price from above $74,000 to below $60,000.
  • Digital asset treasuries are still net buyers of Bitcoin, but their daily purchases have fallen to a fraction of their earlier volume.
  • U.S. spot ETFs have lost more than $5.7 billion since early May, which lowers the odds of a lasting price move higher.

Bitcoin is seeing a sharp drop in institutional buying, which is adding to the recent price decline from above $74,000 (€64,100) to below $60,000 (€52,000). Along with the well-known capital outflows from spot ETFs, there has also been a steep slowdown in buying from digital asset treasuries (DATs), companies that hold Bitcoin as part of their treasury.

Pullback in Buying by Digital Asset Treasuries

Analysts at Glassnode report that net inflows from corporate treasury firms have fallen significantly since Bitcoin dropped below $70,000 (€60,700). While these companies used to buy hundreds of millions of dollars worth of Bitcoin every day, daily purchases have now fallen to a fraction of that volume. Even though these firms are still net buyers, the slowdown points to a more cautious stance and removes an important source of marginal demand in an otherwise weak market.

Impact of Spot ETFs and Market Developments

At the same time, U.S. spot ETFs keep losing capital, with outflows of more than $5.7 billion (€4.9 billion) since early May. These funds, including the eleven largest, added to another outflow of more than $200 million (€173 million) on Wednesday. That makes a sustained price rally less likely. On top of that, the sale of 32 BTC by Strategy, the largest publicly traded Bitcoin holder, added extra pressure, even though the company later bought back about $100 million (€86.7 million) worth of Bitcoin.

Relevance for the European Crypto Market

The drop in institutional buying in the U.S. could also send signals to European investors and companies that are considering Bitcoin as a treasury asset. Lower demand from major institutional players can point to a more cautious market mood, which may matter for European market participants who are closely watching price action and liquidity. That fits into the broader picture, where Bitcoin below $60,000 also moved into a technically weak phase, while ETF outflows added even more pressure to the market.

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