Bitwise Asset Management says institutional investors are accumulating bitcoin during the bear market, pushing the asset's price floor higher despite competition from AI and regulatory delays.
Back
Bitwise says bitcoin floor rising as institutions buy $5B ETF dip
Bitwise Asset Management says institutional investors are accumulating bitcoin during the bear market, pushing the asset's price floor higher despite competition from AI and regulatory delays.
Bitcoin's floor is rising as institutions accumulate during the bear market, Bitwise said, as $5 billion exited spot ETFs in the second quarter.
"Despite competition from AI and regulatory delays, institutional investors are accumulating bitcoin at current levels," Matt Hougan, chief investment officer at Bitwise Asset Management, said. "The floor is rising."
The $5 billion in net outflows from US-listed spot bitcoin ETFs during Q2 was driven partly by capital rotation into AI-related trades and high-profile opportunities such as SpaceX's IPO, according to SoSoValue data. BlackRock's IBIT led the outflows in June alone. The broader liquidity picture showed similar stress in private credit, where redemption requests hit $15.6 billion in the same period, breaching standard 5 percent quarterly caps at most business development companies, Fitch data shows. Average redemption requests rose to 10.3 percent of shares from 9.7 percent in Q1, with some funds seeing as much as 38.1 percent.
The simultaneous rush for liquidity across bitcoin ETFs and private credit, alongside a depleted US Strategic Petroleum Reserve at its lowest since 1983, points to eroding buffers across financial and physical markets, according to QCP Capital. "Different corners, same pattern: the buffers are wearing thin," the Singapore-based firm said. For bitcoin, the key question is whether institutional accumulation can absorb further selling pressure if macro conditions deteriorate.
The divergence between ETF outflows and institutional accumulation reflects a split in how market participants read the current environment, Hougan said. While some investors rotated into AI and other high-growth narratives, others viewed the pullback as an entry point, adding to positions through OTC desks and direct custody. Bitcoin's price has remained range-bound despite the ETF outflows, suggesting that selling pressure is being absorbed by buyers outside the ETF structure. The asset's realized price has held above key levels, reinforcing the view that long-term holders are not distributing at current prices.
Many larger institutional investors are still awaiting clearer rules before committing significant capital, Hougan noted. The SEC's stance on staking in ETFs and the classification of digital assets under US law continue to create uncertainty for traditional allocators. The potential approval of staking in ETH ETFs under a crypto-friendly SEC could provide a template for bitcoin products as well, according to analysts.
Looking ahead, the combination of institutional accumulation, declining available supply on exchanges, and the potential for staking inclusion in ETF products could provide a floor for prices, even as macro headwinds persist. The next trigger for bitcoin may come from regulatory clarity rather than price action alone.
This article is for informational purposes only and does not constitute investment advice.
[1] Bitwise says bitcoin's ‘floor is rising' despite AI boom and regulatory delays[2] Ethereum Indecision Deepens: Some Holders Panic Sell, While Others Buy the Dip[3] Ethereum Price Prediction 2026, 2027 – 2030[4] Billions flowing out of bitcoin ETFs and private credit funds suggest rising market risks[5] Bitcoin's price floor is rising, with long-term potential reaching up to $1 million, says Bitwise. - Pluang
