Bitcoin Updates: Governments and Major Institutions Accumulate Bitcoin While Individual Investors Offload Holdings

Institutional and Sovereign Investors Increase Bitcoin Holdings Amid Market Volatility

During the recent downturn in the cryptocurrency market, the number of Bitcoin addresses holding over 1,000 coins has risen sharply. This uptick points to growing interest from institutional and sovereign entities, even as the market experiences significant price swings. Major players—such as U.S. state governments, university endowments, and sovereign wealth funds from the Middle East—have been strategically accumulating Bitcoin, suggesting a broader move to adopt it as a reserve asset despite short-term fluctuations.

The correction that pushed Bitcoin’s value below $80,000 in late November prompted many institutional investors to take profits and adjust their portfolios. Notably, BlackRock’s iShares Bitcoin Trust (IBIT), the largest Bitcoin ETF, experienced over $66 million in net outflows across two days during the selloff. Nevertheless, this period also saw a notable increase in direct Bitcoin purchases for self-custody, particularly by the state of Texas. Texas invested $5 million in IBIT and has plans to acquire an additional $5 million in Bitcoin directly once its custody infrastructure is in place. This move mirrors a wider trend among U.S. states, with Wisconsin investing $100 million in IBIT and Harvard University’s endowment holding a $443 million position in the fund.

Sovereign wealth funds are also deepening their involvement in Bitcoin. For example, Abu Dhabi’s Mubadala Investment Co. tripled its IBIT holdings in the third quarter of 2025, amassing nearly $518 million in the ETF. In contrast, U.S. retail investors have generally been net sellers during recent volatility. Meanwhile, institutional investors—especially those aged 55 and above—have helped stabilize the market by maintaining long-term positions, which has helped dampen volatility even as crypto liquidations reached $911 million.

ETF Flows and On-Chain Activity Reveal Market Complexity

The relationship between ETF flows and blockchain activity highlights the intricate dynamics of the current market. While IBIT saw outflows during the recent dip, other funds such as Fidelity’s FBTC and Grayscale’s GBTC attracted new investments, indicating that capital is rotating within the sector rather than exiting entirely. Data from Glassnode shows a strong inverse relationship between Bitcoin’s price and net outflows of Tether (USDT), with USDT outflows peaking at $220 million when Bitcoin reached its all-time high of $126,000 in October. This pattern underscores the importance of stablecoins in maintaining liquidity during periods of market stress.

Technical Signals and Market Sentiment

Technical analysis suggests that Bitcoin may be establishing a market bottom. The price has stabilized above the $85,000 mark—a significant psychological threshold—as short-term holders have exited, resulting in realized losses not seen since the collapse of FTX. According to Santiment, retail traders are displaying extremely bearish sentiment, which historically has served as a contrarian indicator. At the same time, institutional investors are accumulating Bitcoin within a consolidation range of $84,000 to $89,900. ETF inflows rebounded to $238 million in mid-November, following a record $3 billion outflow earlier in the quarter.

Outlook: Macroeconomic Factors and Policy Developments

Looking forward, Bitcoin’s path will be shaped by broader economic trends and policy decisions. The possibility of a Federal Reserve rate cut in December is viewed as a potential driver for renewed ETF inflows, with historical trends showing average weekly increases of $400 million during periods of monetary easing. Strategic Bitcoin acquisitions by Abu Dhabi and U.S. states point to a lasting shift toward using cryptocurrency as a tool for diversification. However, the market still faces risks, including potential liquidity shocks from leveraged positions and ongoing geopolitical uncertainties.