Public companies purchasing and holding Bitcoin and Ether have mostly ceased accumulation since the market decline earlier in October, indicating a recent drop in confidence.
According to David Duong, Coinbase Institutional’s global head of investment research, digital asset treasury (DAT) companies that buy Bitcoin (BTC) “have largely ghosted the post-Oct 10 drawdown and are yet to re-engage,” he stated on Sunday.
“In the past two weeks, BTC purchases by DATs have fallen to near year-to-date lows and have not significantly recovered, even on positive days,” he noted.
The slowdown in crypto purchasing suggests the sector is showing caution, as the valuations of many crypto treasury firms have been decreasing towards the value of their asset holdings, while their stock prices have retreated from previous surges.
Bitcoin fell 9% during the period from Oct. 10 to Oct. 11, dropping from approximately $121,500 to lows under $110,500. It briefly fell below $105,000 this month but has since recovered to $114,250, remaining stable over the past 24 hours.
BitMine continues its purchases
Duong pointed out the significant buying lull from Bitcoin investment companies, noting that they are typically “heavy hitters with deep pockets,” but their retreat since Oct. 10 “shows limited confidence on their part.”
The slowdown in buying “highlights some caution from large players following the leverage washout, even at current ‘support’ levels,” he added.
Duong mentioned that BitMine Immersion Technologies, an Ether (ETH) treasury company, has been the “only consistent buyer” since the market downturn, with data indicating it has spent over $1.9 billion since Oct. 10 to acquire nearly 483,000 ETH.
Ether, like Bitcoin, dropped earlier this month, falling over 15% to a low of $3,686 between Oct. 10 and 11, but has since rebounded to $4,130.
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BitMine’s acquisitions, along with “smaller contributions from other funds,” have helped raise total seven-day purchases by ETH treasury companies into positive territory, according to Duong.
However, he warned that if the company “slows or pauses, we worry that the apparent corporate bid could fade.”
“This calls for more cautious positioning in the short term,” Duong stated. “The market seems more fragile when the largest discretionary balance sheets are on the sidelines.”
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