Giants stop, ETF cools down: What is the real reason behind this Bitcoin decline?

Original Title: "Why Are Bitcoin's Biggest Buyers No Longer 'Crazy Buying'?"
Original Author: Oluwapelumi Adejumo
Original Translation: Luffy, Foresight News

For most of 2025, the support level for Bitcoin seemed unshakeable because of the unexpected alliance between corporate digital asset treasuries (DAT) and exchange-traded funds (ETF), which together formed a solid support foundation.

Companies have been buying Bitcoin by issuing stocks and convertible bonds, while ETF inflows quietly absorbed the new supply. Together, they built a robust demand base that helped Bitcoin withstand the pressures of a tightening financial environment.

Now, this foundation is beginning to loosen.

On November 3, Charles Edwards, founder of Capriole Investments, posted on the X platform that his bullish expectations have weakened as institutional buying has slowed.

He pointed out: "For the first time in 7 months, institutional net buying has fallen below daily mining supply, which is concerning."

Institutional Bitcoin buying volume, Source: Capriole Investments

Edwards stated that even if other assets perform better than Bitcoin, this indicator remains a key reason for his optimism.

However, as it stands, about 188 corporate treasuries hold substantial Bitcoin positions, many of which have relatively singular business models aside from their Bitcoin exposure.

Slowdown in Bitcoin Treasury Accumulation

No company represents corporate Bitcoin trading better than MicroStrategy, which recently rebranded as "Strategy."

This software manufacturer, led by Michael Saylor, has transformed into a Bitcoin treasury company, currently holding over 674,000 Bitcoins, firmly maintaining its status as the largest single corporate holder globally.

However, its buying pace has significantly slowed in recent months.

In the third quarter, Strategy only added about 43,000 Bitcoins, the lowest quarterly buying volume this year. Considering that the company's Bitcoin purchases during this period dropped to just a few hundred, this figure is not surprising.

CryptoQuant analyst J.A. Maarturn explained that the slowdown in accumulation may be related to the decline in Strategy's net asset value (NAV).

He noted that investors once paid a high "NAV premium" for every $1 of Bitcoin on Strategy's balance sheet, effectively allowing shareholders to share in Bitcoin's price appreciation through leveraged exposure. However, since mid-year, this premium has significantly narrowed.

With the valuation premium diminishing, buying Bitcoin through new stock issuance no longer brings significant appreciation, leading to a decrease in corporate financing motivation.

Maarturn pointed out: "The difficulty of financing has increased, and the stock issuance premium has dropped from 208% to 4%."

Strategy stock premium, Source: CryptoQuant

Meanwhile, the trend of slowing accumulation is not limited to Strategy.

The Tokyo-listed company Metaplanet had previously emulated this American pioneer, but after a significant drop in its stock price, it recently traded below the market value of its Bitcoin holdings.

In response, the company approved a stock buyback plan while introducing new financing guidelines to expand its Bitcoin treasury. This move indicates the company's confidence in its balance sheet but also highlights the waning enthusiasm of investors for the "crypto treasury" business model.

In fact, the slowdown in Bitcoin treasury accumulation has led to some corporate mergers.

Last month, asset management firm Strive announced the acquisition of the smaller Bitcoin treasury company Semler Scientific. After the merger, these companies will hold nearly 11,000 Bitcoins.

These cases reflect structural constraints rather than a loss of faith. When stock or convertible bond issuances no longer attract market premiums, capital inflows dry up, and corporate accumulation naturally slows.

How is ETF Capital Flowing?

Long viewed as an "automatic absorber of new supply," spot Bitcoin ETFs are also showing similar signs of fatigue.

For most of 2025, these financial investment tools dominated net demand, with subscription volumes consistently exceeding redemption volumes, especially during Bitcoin's surge to historical highs.

However, by late October, their capital flows became unstable. Influenced by changes in interest rate expectations, portfolio managers adjusted positions, and risk departments reduced exposure, causing some weekly capital flows to turn negative. This volatility marks a new behavioral phase for Bitcoin ETFs.

The macro environment has tightened, hopes for rapid interest rate cuts have gradually faded, and liquidity conditions have cooled. Nevertheless, demand for Bitcoin exposure remains strong, but has shifted from "steady inflows" to "impulsive inflows."

Data from SoSoValue visually reflects this shift. In the first two weeks of October, crypto asset investment products attracted nearly $6 billion in inflows; however, by the end of the month, as redemptions rose to over $2 billion, some of the inflows were erased.

Weekly capital flow of Bitcoin ETFs, Source: SoSoValue

This pattern indicates that Bitcoin ETFs have matured into a true two-way market. They can still provide deep liquidity and institutional access, but are no longer one-way accumulation tools.

When macro signals fluctuate, ETF investors may exit as quickly as they entered.

Market Impact on Bitcoin

This shift does not necessarily mean Bitcoin will face a downturn, but it does indicate that volatility will increase. As the absorption capacity of corporations and ETFs weakens, Bitcoin's price movements will increasingly be driven by short-term traders and macro sentiment.

Edwards believes that in this scenario, new catalysts—such as monetary easing, regulatory clarity, or a return of risk appetite in the stock market—could reignite institutional buying.

However, for now, the attitude of marginal buyers is more cautious, making price discovery more sensitive to the global liquidity cycle.

The impact is primarily reflected in two areas:

First, the structural buying that once served as a support level is weakening. During periods of insufficient absorption, intraday volatility may intensify due to a lack of stable buyers to dampen volatility. The halving in April 2024 mechanically reduces new supply, but without sustained demand, scarcity alone cannot guarantee price increases.

Second, Bitcoin's correlation characteristics are changing. As balance sheet accumulation cools, this asset may once again fluctuate with the overall liquidity cycle. Periods of rising real interest rates and a strong dollar may exert pressure on prices, while a loose environment could allow it to regain a leading position in risk-on rallies.

Essentially, Bitcoin is re-entering a macro-reflective phase, with its performance resembling that of high beta risk assets rather than digital gold.

Meanwhile, none of this negates Bitcoin's long-term narrative as a scarce, programmable asset. On the contrary, it reflects the increasing influence of institutional dynamics—these institutions once shielded Bitcoin from retail-driven volatility, and now the very mechanisms that pushed Bitcoin into mainstream portfolios are tightening its ties to capital markets.

The coming months will test whether Bitcoin can maintain its value storage properties in the absence of automatic capital inflows from corporations and ETFs.

Historically, Bitcoin has often demonstrated adaptability. When one demand channel slows, another emerges—potentially from national reserves, fintech integration, or the return of retail investors during macro easing cycles.

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