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Institutional BTC Demand Drops Below Mining Supply, ETFs See Outflows

Institutional Demand for Bitcoin Falls Below Daily Mined Supply, Raising Concerns Over Price Stability and Investor Confidence

  • Institutional demand for Bitcoin (BTC) dropped below the daily mined supply for the first time in seven months.
  • Spot Bitcoin ETFs experienced net outflows totaling $1.67 billion since October 11.
  • Bitcoin treasury companies are trading below their net asset values, indicating declining investor confidence.
  • The daily net outflow from spot BTC ETFs reached $191 million on October 31, with no inflows recorded among 12 ETFs.
  • Reduced institutional demand may increase selling pressure, potentially limiting Bitcoin’s price recovery.

Institutional demand for Bitcoin has fallen below the daily amount mined as of November 3, marking the first time this has happened in seven months. This decline raises concerns about Bitcoin’s long-term price stability.

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Data shows a decreasing trend in Bitcoin purchases by institutional buyers, including spot Bitcoin ETFs and Digital Asset Treasuries (DATs). After a notable market crash on October 11, spot Bitcoin ETFs have recorded $1.67 billion in net outflows. On October 31 alone, these ETFs had a daily net outflow of $191 million, with none of the twelve tracked ETFs seeing inflows.

The decline in demand is illustrated by tracking three key institutional activities: Bitcoin mining output, spot ETF activity, and corporate treasury purchases. The combined demand from spot ETFs and DATs fell below daily mined Bitcoin on November 3, a shift last seen in March. Earlier, gains from spot ETFs had offset reduced corporate buying, but this dynamic has reversed.

Additionally, many Bitcoin treasury companies are trading below their net asset values (NAVs), which measure the company’s worth based on their Bitcoin holdings. This decline suggests worsening investor confidence. The Market Value to Net Asset Value (mNAV) ratio, which compares a company’s market price to the value of its Bitcoin assets, highlights this trend. As values fall, institutional investors may face pressure to sell, increasing market volatility.

Bitcoin’s price has also cooled, declining from a record high above $126,000 on October 6 to near $107,000. The market has remained within a range above $105,000 since July, demonstrating a balance between optimism and profit-taking. The continuation of reduced institutional demand, especially among treasury firms and spot ETFs, may constrain future price growth.

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For additional context about institutional activities, see the original chart and detailed ETF flow data here.

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