Bitcoin Liquidity Reshaped as Institutional Holders Dominate

As reported by AiCoin, Bitcoin's liquidity structure has shifted as institutional entities, including ETFs and listed companies, now hold more than 257,000 BTC, surpassing exchange holdings. This transition has altered market dynamics, with price-sensitive inventory moving from exchanges to institutional pools. The new liquidity framework includes three pools—exchanges, ETFs, and corporate holdings—each with distinct operational characteristics and risk profiles. ETFs, particularly BlackRock’s IBIT, hold 131,000 BTC and introduce settlement delays that dampen short-term volatility but may accumulate redemption risks. Corporate holdings, mainly through Strategy, are sensitive to capital conditions and valuation losses. The rise of ETFs has also reshaped derivatives markets, with arbitrage strategies affecting futures open interest and basis spreads. While volatility has decreased, new tail risks persist, including forced selling from leveraged corporate holdings and ETF redemptions.