In the last 30 days, many institutions have been actively increasing their Bitcoin (BTC) holdings. However, these purchases have not led to significant price changes in the leading digital asset, according to analysts.
Impact of Institutional Purchases on Price
According to CryptoQuant, Bitcoin purchases from ETFs and corporate treasuries have declined this year compared to the November-December 2024 period. ETF purchases have dropped from 86,000 BTC in early December to 71,000 BTC in mid-May, currently standing at 40,000 BTC. This represents a 53% decline during this timeframe.
Meanwhile, Strategy's acquisitions have shrunk from 171,000 BTC in December to 16,000 BTC presently, indicating a 90% plunge.
Overall Demand Trends for Bitcoin
Currently, the overall demand for BTC is contracting, having declined by 895,000 BTC over the last 30 days. This metric needs to expand for a sustainable price rally to occur. However, the current level of institutional demand is insufficient to trigger this expansion. Despite ETF and institutional purchases keeping BTC above $100,000 for some time, further declines could slow price gains because these purchases represent only a fraction of total BTC demand.
Market State Conclusions
CryptoQuant states that Bitcoin’s annual growth chart reflects that ETF and institutional purchases account for only a portion of overall demand. Apparent demand has similarly contracted by 857,000 BTC, significantly offsetting the expansion from ETF and institutional purchases, which accounted for 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 added.
Overall, the demand for Bitcoin from institutional investors is currently insufficient to impact price increases. Additional buying volume is necessary to achieve a sustainable price rally.
