Bitcoin Treasury Firms Aren’t Soaking Up BTC Supply Anymore

What to know:

• Institutional interest in bitcoin treasuries has significantly declined, with daily inflows dropping to their lowest since mid-June.
• Bitcoin's price has cooled, stabilizing above $110,000 after reaching a record high earlier this month.
• The fate of DATs is closely tied to bitcoin's price trend, according to NYDIG.

Even as more firms board the bitcoin treasury bandwagon, their collective appetite for scooping up BTC has weakened.

That decline is nothing short of drastic when you look at the numbers. The seven-day moving average of net daily inflows into bitcoin digital asset treasuries (DATs) recently dropped to 140 BTC, marking the lowest level since mid-June and a sharp decline from a July peak of 8,249 BTC, according to BitcoinTreasuries.net.

Things look even bleaker when you zoom in on daily activity this month: 12 out of 15 days saw under 500 BTC flowing in, including multiple days with no inflows whatsoever.

It tells us that institutional appetite for exposure to BTC via traditional market vehicles has weakened after a period of aggressive buying early this year that helped prop up BTC prices.

Interestingly, bitcoin's price rally has cooled off sharply, dropping to nearly $110,000 after hitting a record high of over $126,000 on October 6. Zooming out, the market has been consolidating within a broad range above $110,000 since June, reflecting a tug-of-war between bullish optimism and profit-taking.

The DAT trend, pioneered by the likes of Strategy, follows a centuries-old playbook of borrowing fiat to acquire scarce, hard assets.

Bitcoin, with its fixed supply capped at 21 million coins and the best performance among major assets over the last decade, has drawn demand from a growing number of digital asset treasuries seeking to hedge inflation and diversify reserves. So far, the top 100 public DATs by market value have cumulative acquired over 1 million BTC.