Bitcoin's First Institutional Bear Market Takes Shape

Bitcoin is experiencing its first institutional bear market, and it's characterized by efficient distribution of losses among Wall Street players.

The current cycle has seen a 53% drop in price, with Bitcoin trading below $59,000 on July 1. This decline is shallower than previous cycles, but it's passing through larger institutional channels.

Spot Bitcoin ETFs provide evidence of the institutional bear market, with $4.21 billion of outflows across three weeks by June 3. The average ETF holder's cost basis stood near $83,000, and Citi counted $3.3 billion of net outflows for the year through June.

The current cycle is different from previous ones, which often involved easy villains such as Terra or Three Arrows Capital. This time around, the decline is more gradual, with investors selling ETF shares to other investors, leaving the fund's holdings unchanged.