BTC Stalls Despite Institutional Demand

Over the last thirty days, many institutions have been accumulating their bitcoin (BTC) holdings. However, these purchases have not significantly impacted the price of this leading digital asset, raising concerns among market participants.

Many are questioning why BTC has remained within a tight range since peaking in late May.

A report by market intelligence firm CryptoQuant shed light on the subdued price momentum in spite of ongoing institutional demand, which analysts believe is currently insufficient.

Declining Institutional Purchases

According to CryptoQuant, Bitcoin purchases from U.S.-based exchange-traded funds (ETFs) and corporate treasuries, such as those from Strategy, have declined in 2024 compared to the November-December period.

ETF purchases dropped from 86,000 BTC in early December to 71,000 BTC by mid-May, and are now at 40,000 BTC—representing a 53% decline during this timeline.

Likewise, Strategy’s acquisitions plunged from 171,000 BTC in December to just 16,000 BTC currently, reflecting a staggering 90% drop.

Although institutional purchases and ETF inflows have helped keep BTC above $100,000 for some time, continuing declines could hinder further price appreciation. It’s worth noting that ETF and institutional buys make up only a small fraction of overall BTC demand, which appears to be contracting.

At the market’s peak in December, ETF and institutional purchases accounted for 33% of total Bitcoin demand growth. They bought a maximum of 257,000 BTC out of a total 771,000 BTC, indicating a larger, erratic demand from other sources.

Overall Demand is Declining

Currently, the overall demand for BTC has contracted, decreasing by 895,000 BTC over the past month. For a sustainable price rally to materialize, this metric needs to grow. However, current institutional demand levels are insufficient for such an expansion.

CryptoQuant noted that Bitcoin’s annual growth chart shows ETFs and institutional purchases represent only a portion of demand. Apparent demand has also decreased by 857,000 BTC, which significantly offsets the growth from ETF and institutional purchases (377,000 BTC and 371,000 BTC, respectively).

> “The bottom line is that ETFs and MSTR’s Bitcoin purchase, while overall positive for Bitcoin price gains, are not sufficient to drive prices to fresh all-time highs,” the market intelligence firm concluded.