Institutional Demand for Bitcoin Crumbles as ETF Outflows Accelerate

Bitcoin's largest buyers are no longer providing reliable support for the cryptocurrency. Exchange-traded funds (ETFs), public-company treasuries, and Bitcoin-linked equities have shown signs of strain as the price struggles to hold above $60,000.

The decline in ETF demand is particularly notable, with a five-week outflow streak totaling over $5 billion. This exceeds the network's daily supply of newly created BTC, which is around 450 per day. A sustained ETF outflow of 2,450 BTC per day would be more than five times that new supply.

Trading volume in US spot Bitcoin ETFs has also decreased significantly, falling by 78% to about $960 million from a high of $4.4 billion in October. This suggests that speculative demand from traditional market participants has thinned, even as redemptions have accelerated.

The slowdown in institutional demand is further corroborated by data on corporate treasury accumulation. Companies like Strategy, Fold, and Nakamoto have sold part of their Bitcoin holdings, adding to concern that the treasury-company trade is becoming less one-directional than it appeared during the rally.