Bitcoin liquidity has been reshaped. Which new market indicators should we focus on?

Today, the largest holders of bitcoin have shifted from whales to publicly listed companies and compliant funds, with selling pressure transitioning from retail market reactions to institutional capital shocks.

Written by: Blockchain Knight

As of the beginning of this week, bitcoin ETFs and publicly listed companies collectively hold about 2.57 million bitcoins, far exceeding the 2.09 million held by exchanges.

This data marks a shift: the price-sensitive inventory in bitcoin’s circulating supply has moved from exchanges to institutional systems, fundamentally reshaping the market’s liquidity characteristics and risk transmission pathways.

Currently, bitcoin liquidity is divided into three new “pools,” each operating under different logic.

The exchange pool reacts the fastest, with over 2 million bitcoins on platforms like Coinbase able to be traded within minutes. This is the main source of short-term selling pressure, but the size of this pool has been shrinking continuously since 2021.

The ETF pool holds about 1.31 million bitcoins (with BlackRock’s IBIT accounting for 777,000), and its shares are traded on the secondary market, requiring T+1/T+2 settlement and other processes. Only after authorized participants redeem shares do bitcoins flow into the spot market. While this friction suppresses intraday volatility, it may accumulate the risk of redemption waves.

The corporate pool holds over 1 million bitcoins (accounting for 5.1% of the circulating supply), with Strategy companies being the main holders. These funds are affected by mark-to-market losses and debt maturities, making them less sticky than long-term holders but more sensitive to the capital environment.

The rise of ETFs has also reshaped the derivatives market. Institutions engage in basis arbitrage by “buying ETFs and selling futures,” driving up open interest in CME bitcoin futures. The basis has become an arbitrage signal rather than a directional indicator.

Research institutions point out that the large-scale ETF outflows in mid-October were actually due to basis arbitrage unwinding, not institutional exits. This mechanical operation makes interpreting capital flows more complex.

At the same time, market volatility has been significantly compressed. Glassnode data shows bitcoin’s long-term realized volatility has dropped from 80% to 40%.

ETFs’ daily trading volumes of several billion dollars have attracted compliant funds. Institutions rebalance funds according to plan rather than panic selling, and combined with tighter market maker spreads, spot liquidity has improved.

However, compressed volatility does not mean risk is eliminated. As holdings concentrate in ETFs and corporations, the impact of a single large-scale redemption or liquidation is far greater than that of retail trading.

The new structure also harbors new risks. Most companies allocate BTC through bond issuance; if the price falls below the cost line and credit tightens, forced selling may be triggered. Although ETFs face no refinancing pressure, continuous redemptions will still channel bitcoin back to exchanges—delaying rather than eliminating selling pressure.

Today, the largest holders of bitcoin have shifted from whales to publicly listed companies and compliant funds, with selling pressure transitioning from retail market reactions to institutional capital shocks.

This shift compresses daily volatility but breeds new tail risks, signaling that the bitcoin market has entered a brand-new, institutionally dominated stage. Trading logic must be thoroughly updated, and we need to refocus on certain data.