After experiencing a severe setback in October, Bitcoin's rebound has been sluggish, and the biggest issue this time is: institutional investors are no longer participating.

Source: Jinshi Data

Bitcoin is struggling to move forward, and the forces that once propelled its surge are fading. After a dismal October, this cryptocurrency has only managed a hesitant recovery, climbing, falling, and then stagnating at slightly above $100,000.

However, this time, Bitcoin's market lacks the strong tailwind that defined much of its trajectory in 2025: the unwavering confidence of institutions.

In the past month, many large buyers, from exchange-traded fund (ETF) allocators to the finance departments of major companies, have quietly exited the market, causing it to lose the kind of capital flow-driven support that helped the token reach an all-time high earlier this year. Their withdrawal has not triggered panic across the entire industry, but it has completely overturned market expectations.

For most of this year, institutional investors have been the pillars of Bitcoin's legitimacy and price. Bloomberg data shows that spot Bitcoin ETFs have attracted over $25 billion in inflows, pushing their total assets to about $169 billion. Their stable capital allocation has helped reshape Bitcoin as a diversification tool for portfolios—a hedge against inflation, currency devaluation, and political turmoil.

However, this once somewhat tenuous assertion has now become vulnerable again, exposing the market to a more insidious but equally destructive risk: the exit and wait-and-see stance of large holders.

Markus Thielen, CEO of 10X Research and former portfolio manager at Millennium Management LLC, believes that signs of market fatigue are increasingly evident. He points out that after Bitcoin recorded a disappointing 10% increase this year (far inferior to the performance of gold or tech stocks), some professional investors are losing patience. Thielen believes that if prices begin to fall again, risk advisors are likely to recommend that institutional clients reduce their positions before the end of the year.

He stated, "At some point, risk managers may intervene and say, 'You need to liquidate or reduce your positions.' There is a risk that Bitcoin will continue to underperform because people need to rebalance their portfolios. When you send reports to investors, your holdings may need more Nvidia stock instead of Bitcoin."

Bloomberg data shows that in the past month, spot Bitcoin ETFs have seen a net outflow of about $2.8 billion. Thielen indicated that if the upward momentum in prices further stagnates, there could be billions more withdrawn before the December Federal Reserve meeting.

This risk is not merely hypothetical. On-chain signals indicate that long-term holders have been selling at highs. Although most speculative leverage was cleared during the market crash on October 10, Thielen warned that if the token's price falls below the critical technical support level of $93,000, more holders may be forced to exit. He said, "There is a huge gap here, and once it breaks, many will quickly fall into losses. Those with weaker balance sheets may be forced to liquidate their positions."

Citigroup has also observed similar danger signals. Alex Saunders, head of quantitative macro research at Citigroup, stated, "My feeling is that new capital entering the market is cautious, with no sense of urgency or eagerness to invest. Perhaps people have lost their enthusiasm."

He pointed out changes in wallet behavior. Citigroup's analysis shows that the so-called Bitcoin "whales," or wallets holding more than 1,000 Bitcoins, are gradually decreasing in number. In contrast, the number of retail investors holding less than one Bitcoin has increased.

Citigroup noted that typically, a weekly inflow of $1 billion would boost prices by about 4%, which means the current stagnation in capital inflows is suppressing price increases.

The term "whale" can refer to a broad range of holders, including early adopters who bought Bitcoin when it was worth just a few dollars, as well as institutional accounts and exchanges. Additionally, the dynamics of wallets do not always indicate direct selling; large holders often transfer tokens between different wallets for liquidity or custody purposes.

One of the most typical examples of a buying strike in the digital asset space comes from Michael Saylor's Strategy Company, which has transformed from a software company into a Bitcoin hoarding giant. It was once a benchmark for corporate finance departments investing in cryptocurrencies, but now its stock price has fallen to a level nearly equal to the value of its Bitcoin holdings, indicating that investors are no longer willing to pay a premium for Saylor's high-conviction leverage model.

Nevertheless, while the momentum in the crypto market has weakened, there are almost no signs of panic. Over the past 18 months, Bitcoin's price has still risen significantly, and speculative demand across various markets remains strong.

Analysts at the cryptocurrency exchange Bitfinex caution against interpreting recent data as panic selling or a market peak. Their research shows that wallets holding more than 10,000 Bitcoins saw only a 1.5% decrease in balance in October, which is hardly a "fire sale." They also stated that the outflow from ETFs is "temporary weakness rather than structural risk."

Bitfinex analysts wrote, "The conclusion is that whales are not panic selling but are gradually taking profits in an environment of weak ETF demand—this pattern has repeatedly appeared in previous cycles. Once capital inflows and liquidity conditions improve, these rebalancing periods typically reset market positions and volatility for the next round of increases."

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