Institutional demand for Bitcoin (BTC) is showing signs of a slowdown, potentially exerting downward pressure on the cryptocurrency's price. For the first time in seven months, this demand has fallen below the daily supply of newly mined Bitcoin.
According to analysis by Charles Edwards, head of Capriole Investments, Bitcoin's supply-demand dynamics have shifted significantly. While mining output has remained relatively constant, purchases from institutional investors, including through spot Bitcoin ETFs and Digital Asset Treasury (DAT) corporate activities, have declined sharply.
- Spot Bitcoin ETFs have experienced $1.67 billion in net outflows since October 11.
- On October 31, all twelve spot Bitcoin ETFs recorded daily net outflows, totaling $191 million, with no inflows observed.
This drop in demand suggests a weakening institutional appetite for BTC exposure via traditional market vehicles, following a period of aggressive buying earlier this year that helped prop up BTC prices. Edwards expressed concern, labeling the situation "not good" as institutional demand metrics were the main factor keeping him bullish in recent months.
In line with this trend, BTC's rally has cooled, dropping towards $107,000 after reaching a record high of over $126,000 on October 6. Bitcoin treasury firms (DATs) are also facing challenges, with their Market Value to Net Asset Value (mNAV) ratios trading below book value. This signals eroding confidence and could intensify selling pressure, especially as many of these 188 companies reportedly lack a business model beyond relying on Bitcoin price appreciation.
Should this downward trend in institutional demand persist, Bitcoin's price recovery may remain limited until spot ETFs and major institutions resume large-scale acquisitions.