Have institutions stopped buying the dip? The structural shift behind the fall of BTC.

Question

The performance of Bitcoin over the past few months has been a bit bewildering. From the beginning of the year until now, institutions and ETFs have been continuously buying, supporting the price of BTC. But now this “big investor” seems to be tired.

Institutions are no longer crazy

Charles Edwards, the founder of Capriole Investments, recently dropped a data bomb on X: For the first time in nearly 7 months, institutional net inflows have fallen below daily mining output. What does this mean? It means that the coins bought by institutions are not enough to cover the new coins mined by miners.

The most typical example is the company that was previously renamed “Strategy” (formerly MicroStrategy). This guy holds 674,000 BTC, making him the largest corporate Bitcoin hoarder in the world. However, in Q3, they only added 43,000 coins, setting a new low for quarterly increases this year. It's worth noting that they haven't really purchased much in the past few months.

Where is the problem? CryptoQuant analyst J.A. Maarturn pointed out that the company's NAV premium has collapsed. Previously, investors were willing to pay more than twice the price for every $1 of Bitcoin assets in Strategy, equivalent to leveraging to earn on BTC's increase. Now this premium has plummeted from 208% to 4%. Once new shares are issued to buy coins and no profit can be made, the enthusiasm for financing naturally wanes.

The same script is also being replayed at the Japanese listed company Metaplanet. Originally trying to follow the trend, the stock price has now even fallen to below the market value of Bitcoin assets.

The enthusiasm for ETFs has also faded.

Spot Bitcoin ETFs were once synonymous with “new coin absorbers”. Throughout the first half of 2025, they were steadily sucking in, with orders far exceeding redemptions. But by the end of October, the winds changed.

SoSoValue's data shows:

The first two weeks of October: Attracting nearly $6 billion in inflow
By the end of October: Redeemed over $20 billion

What is the essence? The ETF has matured. It is no longer just a one-way silly buy; it has turned into a real two-way market. As soon as the macro environment tightens and the expectation of interest rate cuts collapses, fund managers immediately flee. They enter quickly and exit just as fast.

What will BTC be like?

In the short term, this doesn't necessarily mean a crash, but volatility is definitely going to increase. With the loss of these two stable buyers, institutions and ETFs, the fate of BTC is more determined by short-term trading and macro sentiment.

This is specifically reflected in two aspects:

1. The support level has softened

The previous “structural buying” has begun to disappear. The market lacks stable buyers, and intraday volatility will be more severe. Don't forget that after the halving in April 2024, although the supply of new coins will decrease, if there is no sustained demand, scarcity won't save the price.

2. The correlation of BTC is switching

It may no longer be “digital gold” now, but has turned back into a high-beta risk asset—dancing along with the global liquidity cycle. Rising interest rates + a strong dollar = BTC under pressure; conversely, a loose environment = BTC leading the gains.

Still optimistic in the long term

Edwards believes that as long as new catalysts emerge—such as central banks easing, clearer regulations, or a rebound in the stock market—institutions will re-enter the market. However, the marginal buyers at present are more cautious, and price discovery has become more sensitive to global liquidity.

However, this does not negate the long-term logic of BTC as a scarce programming asset. Historically, BTC has always been able to adapt, when one demand channel cools, another heats up — whether it is sovereign nation reserves, fintech integration, or retail investors re-entering during a loose cycle.

The test in the coming months is: Can BTC maintain its value storage characteristics without the automatic buying support from institutions and ETFs?