Publicly traded companies that buy and hold Bitcoin and Ether have largely stopped hoarding since the market crashed in early October, a move that signals a recent decline in confidence.
David Duong, global head of investment research at Coinbase Institutional, said on Sunday that digital asset treasury (DAT) firms that buy Bitcoin (BTC) have “mostly avoided the drawdown since October 10 and have not yet re-engaged.”
“Over the past two weeks, DAT purchases of BTC have fallen to near year-to-date lows and have not recovered meaningfully, even on Green Day,” he added.
The slowdown in crypto purchases signals cautiousness in the sector, as the value of many crypto tolerance companies has fallen towards the value of their holdings while stock prices have cooled from a massive rally.
Bitcoin fell 9% from October 10th to October 11th, dropping from around $121,500 to a low below $110,500. It fell to a low of less than $105,000 this month, but has since recovered to $114,250 and has remained flat over the past 24 hours.
BitMine is still being purchased
Duong said the slowdown in Bitcoin buying companies’ purchases is significant because they are “usually deep-pocketed heavy hitters,” but the company’s rebound since Oct. 10 “shows that their confidence is limited.”
sauce: David Duong
He added that the slowdown in buying “underscores the caution of major players following the leverage washout, even at current ‘support’ levels.”
Duong said data shows that Ether (ETH) treasury company Bitmine Immersion Technologies has been the “only consistent buyer” since the market decline, having spent more than $1.9 billion buying approximately 483,000 ETH since October 10.
Ether fell along with Bitcoin earlier this month, dropping more than 15% to a low of $3,686 between October 10 and 11, but has since recovered slightly to $4,130.
Duong said the Bitmine purchases and “small contributions from other funds” pushed the total seven-day purchases by ETH Treasury into positive territory.
But he added that he is concerned that if the company “slows down or pauses, there will be less apparent appetite for acquisitions.”
“We believe this will require a more cautious stance in the short term,” Duong said. “The market looks more vulnerable once the largest discretionary balance sheets are sidelined.”
