Institutional net Bitcoin purchases drop below mining supply for first time in months

Institutional net Bitcoin purchases are falling below daily mining supply for the first time in seven months. This change signals a key shift in market structure and investor sentiment across the crypto market.

Key points:

• Institutional net Bitcoin purchases are now below the daily mining issuance.

• ETF demand dropped sharply after the October 10 market crash.

• BTC whales are transferring billions in Bitcoin to major exchanges.

• Analysts warn of reduced institutional confidence in the short term.

From my standpoint, the balance between Bitcoin inflows and outflows defines how the market moves. When institutional net Bitcoin purchases fall below mining supply, new selling pressure emerges. That means more Bitcoin enters the market than institutions are buying.

Charles Edwards, head of Capriole Investments, explained this shift on X earlier this week. He said, “This was the main metric keeping me bullish. Not good.” His words reflect growing unease among professionals who once viewed Bitcoin as a safe hedge amid risk asset gains.

Institutional demand weakens as ETF flows shrink

The fall in ETF demand is striking. Spot Bitcoin ETF activity helped sustain the market when corporate Bitcoin holdings slowed in mid-August. As ETF inflows dropped after the October 10 crash, the gap widened. The Bitcoin price, which had held firm through September, started showing strain.

The data reveals how each source of institutional demand—miners, ETFs, and corporate treasuries—plays a separate role. When corporate digital asset treasuries stopped accumulating, ETF inflows kept the balance. Now that both have faded, institutional net Bitcoin purchases can no longer absorb the new coins mined each day.

Edwards’ analysis charted this decline clearly. His histogram tracking of institutional pressure changed from green to red. In market terms, that means buying pressure turned into selling pressure.

$BTC Price Now

Whales move Bitcoin to exchanges amid uncertainty

While institutional flows fade, large BTC whales are also moving coins to centralized exchanges. On-chain data firm Lookonchain reported that a major whale known as “BitcoinOG (1011short)” deposited around 13,000 BTC worth $1.48 billion since October 1.

Similarly, another whale, “Owen Gunden,” transferred over 3,200 BTC to Kraken after October 21. When whales move coins from private wallets to exchanges, traders often expect possible liquidation events. It does not always mean immediate selling, but it usually signals preparation for market exits.

This behavior reflects waning confidence in short-term gains. As ETF demand cools, Bitcoin whales may be seeking liquidity before the next market phase. Historically, these moments of low institutional net Bitcoin purchases and high whale exchange activity precede large volatility periods.

Mining supply pressure adds to market tension

Mining supply is steady, averaging around 900 new BTC daily. When institutional net Bitcoin purchases exceed this figure, supply tightens and price usually rises. When demand drops below it, new coins increase selling pressure.

The current situation mirrors early 2023 patterns when Bitcoin price hovered near $25,000 before the ETF optimism began. If demand remains weak, price corrections may deepen before the next halving.

Still, this does not guarantee long-term decline. Edwards noted that “the trend could flip tomorrow, next week, or in two years.” The market remains dynamic. The next cycle could quickly restore confidence if ETF inflows recover or macro conditions shift.

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What investors should watch next?

For now, traders should monitor three main indicators:

1. ETF demand levels and inflow recovery signals.

2. On-chain whale movement toward or away from exchanges.

3. Daily mining supply compared to new institutional accumulation.

A return of institutional demand will depend on renewed macro appetite for Bitcoin exposure. Clearer regulation and improved ETF volume could spark new buying. Until then, the Bitcoin price may stay volatile, as selling pressure matches or exceeds daily issuance.

From my analysis, the crypto market is entering a balancing phase. Lower institutional net Bitcoin purchases, combined with whale selling and steady mining supply, suggest a cooling sentiment. Yet, each cooling phase in Bitcoin’s history has set the stage for renewed growth once conditions improve.