Bitcoin Treasury Sector 'Breaking' as Institutional Holdings Plummet 10%

The Bitcoin institutional investment vehicle sector has seen a 10% reduction in its BTC holdings since May, according to analysis. This decline comes as the Bitcoin treasury model is deemed 'breaking' due to company valuations falling below net asset value.

Data from onchain analytics platform CryptoQuant shows that combined institutional BTC exposure has fallen from 1.33 million to 1.20 million BTC over three months. The drawdown affects corporate treasuries, with Strategy, the largest Bitcoin treasury of any public corporation, selling 1,638 BTC last week.

Strategy's shares trade below the net asset value (NAV) of their BTC holdings, with a discount of 0.7 as of Thursday. However, factoring in $8 billion debt and liquidation preference, the NAV equals 1.03. CryptoQuant notes that the on-chain evidence supports a loss of institutional demand.

The Coinbase Premium index has seen a record 93 days of negative readings, with the premium measuring the difference in price between Coinbase's and Binance's BTC/USDT pairs. Analysis suggests that the return of the premium is necessary for a BTC price recovery.