Bitcoin fund holdings fall 10% as treasury trade breaks

Institutional Bitcoin fund holdings fell 10 percent to 1.20 million BTC over three months as the corporate treasury trade shows signs of breaking, CryptoQuant data shows.

"Bitcoin treasury companies once amplified demand through a reflexive financing loop. Their shares traded above the value of their Bitcoin holdings, allowing them to issue equity or debt, buy more Bitcoin and reinforce the premium. That mechanism weakens when market capitalisations fall below net asset value, and financing becomes dilutive," Novaque Research, a contributing analyst at CryptoQuant, said.

Combined institutional BTC exposure across trusts, exchange-traded funds and closed-end funds fell from 1.33 million to 1.20 million BTC over three months, according to CryptoQuant. Business intelligence firm Strategy, the largest corporate Bitcoin holder, sold 1,638 BTC last week. Its modified net asset value stands at 1.03 when factoring in $8 billion in debt and the liquidation preference of its STRC preferred stock, versus 0.7 on a basic share count basis.

The drawdown coincides with the Coinbase Premium Index logging a record 93 consecutive negative days since early May, indicating muted US institutional buying. Citi cut its Bitcoin price forecast to $53,000 through 2027, citing ETF flows as an "important driver of prices." Bitcoin traded at $64,802 as of Aug. 6, with the Crypto Fear and Greed Index in Extreme Fear territory.

The on-chain evidence supports a loss of institutional demand, although it cannot directly isolate treasury companies, CryptoQuant noted. The Coinbase Premium Index, which measures the price difference between Coinbase's and Binance's BTC/USDT pairs, has been negative since the start of May — a record streak.

Web3 marketing platform FOUR argued the months-long negative reading did not stem from blanket US selling pressure. "Until the premium flips positive, institutional buying from U.S. investors appears muted — suggesting this is more of a demand shortage than aggressive selling," it said on X.

The broader market backdrop remains fragile. Bitcoin's 50-day average sits below its 200-day average, keeping the death-cross signal alive. Spot Bitcoin ETFs continued to withdraw funds in late January, and November 2025 saw record monthly outflows above $2.33 billion. October 2025 brought the largest single-day liquidation event in crypto history, with over $19 billion in positions wiped out across roughly 1.6 million traders after President Donald Trump unveiled a 100 percent tariff on Chinese imports.

Short-term holders face paper losses and are rushing for exits, with traders treating $70,000 as the next line in the sand. Losing that level could trigger forced selling. Bitcoin's all-time high of $126,173 was set on Oct. 6, 2025, before the correction.

The implications extend beyond Bitcoin itself. If the treasury model continues to weaken, companies like Strategy that used equity and debt issuance to accumulate BTC face a constrained financing loop. The reflexive mechanism that once amplified demand now works in reverse — falling share prices relative to NAV make further issuance dilutive, potentially forcing more sales.

This article is for informational purposes only and does not constitute investment advice.