Institutional Sales Pressure Mounts as Companies Forced to Unload Bitcoin Reserves

Financial instruments backing institutional companies' Bitcoin reserves could create selling pressure on certain dates. According to Matthew Sigel, head of digital asset research at VanEck, many companies use convertible bonds and loan facilities to finance their Bitcoin holdings. These financial instruments come with specific maturity and dividend dates that may require companies to sell Bitcoin.

For example, Bitdeer emptied its entire Bitcoin treasury in February by withdrawing 943.1 BTC from its reserves to invest in AI data centers. Another company, Strategy, sold 32 BTC in May to fund dividend payments, which was linked to a drop in Bitcoin prices and a decline in STRC shares.

As of July, STRC shares are trading 15% below their face value. JPMorgan notes that this new sales policy poses a two-pronged risk to Bitcoin markets, with the potential for increased market supply putting downward pressure on prices.