• ​Bitcoin's largest structural buyers are providing less support as ETF inflows and corporate accumulation slow down.
• Wintermute states that Strategy's latest Bitcoin purchases have eased balance sheet concerns but failed to strengthen market demand.
• Record Bitcoin ETP outflows highlight weakening structural demand despite signs that selling pressure is easing.

Bitcoin (BTC) came under renewed pressure after geopolitical tensions resurfaced and the Federal Reserve (Fed) struck a more hawkish tone, according to a Wintermute report on Tuesday.

Bitcoin's structural buyers are providing less demand strength

The report states that Bitcoin's two largest sources of structural demand are contributing less buying pressure to support its price.

"The two largest structural buyers, ETFs and Strategy, are both contributing less marginal demand than in prior phases," Wintermute wrote.

The firm notes that while concerns over Strategy's balance sheet have eased following its latest Bitcoin purchases, that has not translated into stronger demand. Last week, Strategy announced it purchased 1,587 BTC for roughly $100 million in the previous week after market fears briefly emerged over its modest Bitcoin sale earlier in June. The firm acquired a smaller purchase of 520 BTC last week, per a Monday filing.

Wintermute argues that the broader flow picture remains unchanged.

"The funnels aren't turning. This is a market stabilizing beneath the surface on lighter positioning and cleaner leverage, not one finding new buyers," the report said.

K33's Head of Research, Vetle Lunde, echoed similar concerns in the firm's latest report, arguing that fears of an imminent forced Bitcoin-selling event remain overstated despite growing scrutiny of Strategy's financing model.

The firm noted that weaker prices for Strategy's preferred shares have reduced the company's ability to raise fresh capital for additional Bitcoin purchases.

However, after its recent $300 million capital raise, Strategy still holds enough US dollar reserves to cover roughly 10 months of preferred-share dividend payments.

"While the situation is far from urgent, we strongly discourage investing in such products," K33 said, adding that the probability of Strategy suspending dividend payments is higher than the likelihood of a forced Bitcoin-selling spiral.

Record ETP outflows point to weak demand

K33's report also pointed to weak structural demand across Bitcoin exchange-traded products (ETPs), with one-year notional flows flipping negative for the first time since November 2023. Recent outflows have also reduced global Bitcoin ETP holdings by 127,774 BTC from their peak, an 8% decline that marks the largest relative drawdown on record for the sector.

Despite the drawdown, K33 said selling pressure has eased in recent weeks. Average daily outflows have slowed to around 625 BTC over the past two weeks, down from roughly 4,462 BTC during the heavy selling period between May 11 and June 5.

"The subsiding outflows have been a critically important factor in allowing prices to stabilize, while the extreme outflows earlier in May and June were the primary driver of BTC's relative weakness," K33 wrote.

The firm also noted that Bitcoin ETP investors have retained 92% of peak holdings despite Bitcoin losing roughly half its value from last year's highs. The momentum suggests long-term investors have largely maintained their positions.

K33 argued that Bitcoin remains stuck in a low-conviction environment, with spot trading volumes hovering near multi-year lows and institutional participation remaining subdued.

BTC is trading at $62,390, down 3.1% over the past 24 hours at the time of writing.