Bitcoin faces shaky support as institutional buying wanes

Throughout most of 2025, Bitcoin’s stability seemed unshakeable, thanks to the support from an unexpected partnership between corporate treasuries and exchange-traded funds.

Various companies utilized stock and convertible debt to acquire the token, while ETF inflows quietly absorbed new supply. This collaboration established a strong demand base that allowed Bitcoin to withstand tightening financial conditions.

However, this foundation is now undergoing a transformation.

In a recent post on X dated Nov. 3, Charles Edwards, the founder of Capriole Investments, expressed a weakening in his bullish outlook as institutional accumulation slowed down.

He highlighted:

“For the first time in 7 months, net institutional buying has dropped below daily mined supply. Not Good.”

According to Edwards, this metric was crucial in keeping his optimism intact, even as other assets outperformed Bitcoin.

Nevertheless, the current scenario indicates that there are approximately 188 corporate treasuries holding substantial Bitcoin positions, many of which have limited business models beyond their exposure to the token.

Slowdown in Bitcoin treasury purchases

One company that epitomizes the corporate Bitcoin trend is MicroStrategy Inc., now known as Strategy.

Under the leadership of Michael Saylor, this software company has transitioned into a Bitcoin treasury entity, holding over 674,000 BTC and solidifying its position as the largest single corporate holder.

However, its purchasing activity has significantly decreased in recent months.

For instance, Strategy acquired around 43,000 BTC in the third quarter, marking its lowest quarterly purchase of the year. This decline is not surprising, considering that the company’s Bitcoin acquisitions dwindled to just a few hundred coins during the period.

Analyst J.A. Maarturn from CryptoQuant suggested that this slowdown could be linked to Strategy’s diminishing NAV.

He explained that investors previously paid a substantial “NAV premium” for every dollar of Bitcoin on Strategy’s balance sheet, providing shareholders with leveraged exposure to Bitcoin’s upside. However, this premium has decreased since mid-year.

With diminishing valuation benefits, issuing new shares to acquire Bitcoin is no longer as lucrative, reducing the incentive to raise capital.

Maarturn noted:

“Capital is harder to raise. Equity issuance premiums have dropped from 208% to 4%.”

This trend of cooling off extends beyond MicroStrategy.

Metaplanet, a Tokyo-listed company that emulated the US pioneer, recently traded below the market value of its Bitcoin holdings following a substantial decline.

In response, the company initiated a share buyback program and implemented new capital-raising guidelines to expand its Bitcoin treasury. This move indicated confidence in its financial position but also underscored the diminishing investor enthusiasm for “digital-asset treasury” business models.

Furthermore, the slowdown in Bitcoin treasury acquisitions has led to mergers between some of these companies.

Just last month, asset management firm Strive announced its acquisition of Semler Scientific, a smaller BTC treasury company. This merger enables these entities to collectively hold almost 11,000 BTC at a premium that is becoming increasingly scarce in the industry.

These instances reflect a structural limitation rather than a loss of conviction. When equity or convertible issuance no longer commands a market premium, capital inflows diminish, naturally slowing down corporate accumulation.

What about ETF flows?

Spot Bitcoin ETFs, which have historically been seen as automatic absorbers of new supply, are also displaying signs of exhaustion.

For the majority of 2025, these financial investment products dominated net demand, with creations consistently surpassing redemptions, particularly during Bitcoin’s surge to all-time highs.

However, by late October, their flows began to fluctuate. Some weeks saw a shift to negative territory as portfolio managers adjusted positions and risk desks reduced exposure in response to changing interest-rate expectations.

This volatility marks a new phase in the behavior of Bitcoin ETFs.

The macroeconomic backdrop has tightened, and expectations for rapid rate cuts have dwindled; real yields have increased, and liquidity conditions have cooled.

Nonetheless, the demand for Bitcoin exposure remains robust, but it now comes in bursts rather than steady streams.

Data from SoSoValue illustrates this transition. In the first two weeks of October, digital-asset investment products attracted nearly $6 billion in inflows.

However, by the end of the month, a portion of those gains had been reversed as redemptions surpassed $2 billion.

This pattern indicates that Bitcoin ETFs have evolved into genuine two-way markets. While they still offer substantial liquidity and institutional access, they no longer function solely as one-directional accumulation tools.

During periods of macroeconomic uncertainty, ETF investors can exit their positions as swiftly as they entered.

Implications for the Bitcoin market

This shifting landscape does not automatically signify a downturn, but it does suggest increased volatility. With the softening of corporate and ETF absorption, Bitcoin’s price movements will increasingly depend on short-term traders and macroeconomic sentiment.

In such scenarios, Edwards proposes that new catalysts such as monetary policy adjustments, regulatory clarity, or a resurgence in risk appetite in equity markets could reignite institutional interest.

However, with the current caution among potential buyers, price discovery becomes more sensitive to global liquidity trends.

Consequently, this situation has a dual impact.

Firstly, the structural demand that previously acted as a support is weakening.

During periods of under-absorption, intraday fluctuations can intensify due to the lack of consistent buyers to stabilize volatility. While the halving in April 2024 mechanically reduced new supply, the absence of steady demand means scarcity alone does not guarantee price increases.

Secondly, Bitcoin’s correlation profile is undergoing a transformation. As balance-sheet accumulation decelerates, the asset may once again follow broader liquidity trends. Phases of rising real yields and a strong dollar could exert pressure on prices, while easing conditions might restore Bitcoin’s leadership during risk-on market rallies.

In essence, Bitcoin is transitioning back to its macro-driven phase, behaving less like digital gold and more like a high-beta risk asset.

However, none of this diminishes Bitcoin’s long-term narrative as a limited, programmable asset.

Instead, it underscores the increasing influence of institutional dynamics that previously shielded it from retail-driven fluctuations. The same mechanisms that propelled Bitcoin into mainstream investment portfolios are now tethering it more closely to the gravitational pull of capital markets.

The upcoming months will test whether the asset can maintain its appeal as a store of value without the automatic inflows from corporate treasuries or ETFs.

Historically, Bitcoin has shown resilience by adapting: when one demand source ebbs, another often emerges—whether from sovereign reserves, fintech partnerships, or renewed retail engagement during macroeconomic easing phases.