The concept of institutionalizing cryptocurrency was touted as the key to mass adoption, but recent trends suggest that it has had the opposite effect. Three main channels through which institutional flows are directed - spot ETFs, digital-asset treasuries (DATs), and leveraged products from Michael Saylor and Tom Lee - have all turned into liabilities.
Spot ETFs have seen a significant decline in value, with more than half of all BTC in circulation being held at an unrealized loss. This has resulted in a $4 billion bleed over the past three weeks, with Ethereum funds recording outflows of -$661.9 million over the same period.
Digital-asset treasuries (DATs), which were touted as a sign of institutional adoption, have turned out to be nothing more than leverage. These companies raise cash by selling stock and issuing debt, then use it to buy cryptocurrency, only to sell it when the value drops.