Institutional Bitcoin Demand Falters as Treasury Holdings Plummet 10% in Three Months

The Bitcoin treasury trade is showing signs of stress as institutional investment vehicles have shed 10% of their BTC holdings since May, according to analysis. This decline comes as corporate treasuries face upheaval, with Business Intelligence software company Strategy selling 1,638 BTC last week.

Data from CryptoQuant shows that combined institutional BTC exposure has fallen from 1.33 million to 1.20 million BTC over three months. The drawdown is attributed to a weakening of the Bitcoin treasury model, which relies on a reflexive financing loop where shares trade above the value of their BTC holdings.

This mechanism weakens when market capitalizations fall below net asset value (NAV), and financing becomes dilutive. Several Bitcoin treasury companies have seen their stock trading below NAV, including Strategy, whose discount disappears according to valuation methodology used.