Public companies that buy and hold Bitcoin and Ether have largely stopped accumulating since the market plunged earlier in October, a move that signals a recent decline in confidence.
Digital asset treasury (DAT) firms buying Bitcoin (BTC) “largely ignored the post-October 10 pullback and have yet to reengage,” Coinbase Institutional Global Head of Investment Research David Duong he said on Sunday.
“During the past two weeks, BTC purchases via DATs have fallen to near year-to-date lows and have not recovered significantly, even on green days,” he added.
The slowdown in crypto buying signals that the sector is wary, as the values of many crypto treasuries have slid in line with the value of their asset holdings, while their share prices have cooled off from the massive rally.
Bitcoin fell 9% between October 10 and October 11, falling from around $121,500 to lows below $110,500. It fell to lows below $105,000 this month, but has since recovered to $114,250, trading flat over the past 24 hours.
BitMine is still buying
Duong said the lull in buying by Bitcoin buyers is significant because they are “usually heavy hitters with deep pockets,” but their retreat since Oct. 10 “signals limited confidence on their part.”
The slowdown in buying “underscores some caution by major players after the leverage washout, even at current ‘support’ levels,” he added.
Duong said Ether (ETH) treasury firm BitMine Immersion Technologies has been “the only consistent buyer” since the market fell, with data showing that he spent over $1.9 billion to buy nearly 483,000 ETH since October 10th.
Ether fell along with Bitcoin earlier this month, falling more than 15% to a low of $3,686 between October 10 and 11, but has since recovered slightly to $4,130.
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The purchase of BitMine, along with “smaller contributions from other funds,” boosted the overall seven-day buying of ETH treasury companies in a positive direction, Duong said.
However, he added that if the company “slows down or stalls, we worry that the obvious corporate offering could fade.”
“We think this calls for more cautious positioning in the short term,” Duong said. “The market seems more fragile when the largest discretionary balance sheets are on the sidelines.”
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