Institutional Demand Wanes as Bitcoin's Next Rally Requires Trillions

Bitcoin's next major rally may depend less on investor sentiment and more on whether large institutions are willing to fund it. The cryptocurrency has grown into a market too large to be moved by small amounts of capital, making each bull market require increasingly more capital for smaller gains.

According to Ki Young Ju, CEO of CryptoQuant, the current cycle has absorbed about $697 billion and produced a gain of around 689%, underscoring the need for much larger pools of capital to move it meaningfully higher. In comparison, the 2011 cycle saw a roughly 55,000% price increase linked to about $2.7 billion in net capital inflows.

The drawdown from Bitcoin's peak last October has tested institutional adoption and raised questions about whether it can attract enough durable capital to offset its declining price sensitivity. A shift towards treating Bitcoin as a core macro asset is needed for another major rally, rather than relying on retail-led ETF trades alone.