The Bitcoin Coup: Institutions’ Quiet Seize Of Control

Nobody talked about causality, because obviously retail wasn't into those kinds of things. The numbers are far more important than the movers. Still, the fact remains, this isn’t the masses’ bull run. An institutional-grade heist was completed in silence.

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Bitcoin was never meant to be an ETF product. It was born to be stateless, trustless, adversarial, ideals that were borne by early adopters and believers. But markets move on capital. And since early 2024, serious capital has poured into Bitcoin with precision. While the retail market chased memes and alts, global institutions redrew the ownership map of the most valuable digital asset on Earth.

The flood began in early 2024 with the long-awaited SEC approval of US-based spot Bitcoin ETFs. By July 2025, over 1.45 million BTC, roughly 7% of total supply, sits locked inside regulated ETF vehicles. BlackRock’s IBIT alone holds over 706,000 BTC. Fidelity’s FBTC follows closely. Together, they control more Bitcoin than most sovereign nations. 

These ETFs benefit from consistent inflows from global investors seeking regulated crypto exposure, something sovereign nations rarely match in volume or frequency. With trillions in assets under management and streamlined operational infrastructure, the firms above are structurally equipped to scale their holdings quickly. Their legal standing under US regulation unlocks access to pension funds, family offices, and conservative capital, enabling them to crowdsource accumulation at a pace no government treasury can replicate. Unlike nation-states, by design, these asset managers are financially incentivised to accumulate and hold Bitcoin as long as demand persists.

There is skepticism about what this concentration of Bitcoin means for the asset’s future. NYU professor Aswath Damodaran has warned that companies treating Bitcoin as a treasury asset are straying dangerously from their core mission. “It’s speculative at best,” he argues, emphasising that the volatility and narrative risks outweigh the perceived hedge benefits. Within the same principles, critics like Nobel laureates and economists such as Nouriel Roubini continue to view Bitcoin as speculative or even a bubble, arguing that its rapid institutional consolidation may undermine the decentralised ethos that once defined it.

These ETFs are automated demand machines. They don’t sell the rip. They accumulate through structured inflows from macro hedge funds, mostly, though retirement portfolios and family offices count as well. Every week, the same rhythm plays out: dollar flows in, Bitcoin gets bought, supply tightens. Unless the flows reverse, Bitcoin’s free float is bound to disappear.

More than just funds, Strategy’s (formerly MicroStrategy) treasury allocation in 2020 has mutated into a relentless buying engine. As of July 2025, Strategy holds 601,550 BTC, nearly 3% of the entire supply. Saylor called his legendary rinse-and-repeat tactic the “Flywheel”.

You can already guess that public companies have followed suit. Tesla still holds its ~11,500 BTC. Marathon Digital boasts 49,000. Over 130 firms have added Bitcoin to their books with less fanfare but clear intent. When you include private companies, the tally grows to 1.28 million BTC held in treasuries. 

Think about that, a nice 6% of the entire capped supply. Add ETF holdings and government reserves, yes, the US and China each possess over 200,000 BTC from seizures and you arrive at a sobering figure: over 4.8 million BTC now sits in the hands of institutions and states. Nearly a quarter of all Bitcoin has been absorbed by the very actors it once sought to circumvent.

Meanwhile, the method of acquisition for assets has completely evolved. Institutions don’t market-buy on Coinbase - they call OTC desks, far simpler, more flexible. Bitwyre also handles OTC desks with fast completion and the best price around, ask your friends.

Wintermute, Genesis, and Cumberland move away from being just liquidity providers into operators in the market. Wintermute’s own reports show their OTC volumes grew 313% year-over-year, now averaging $15 billion daily. And unlike retail, which mostly diversified into thousands of altcoins, institutions are more focused than ever. Bitcoin and Ether account for 67% of their allocation. See the noise?

On the other hand, Tether and USDC have become crucial for institutional crypto trading. An estimated 62% of global OTC settlements now occur in stablecoins, often outside of traditional banking hours. Daily institutional stablecoin transfers exceed $18 billion. When paired with regulated custodians like Coinbase Custody, Anchorage, or Fireblocks, the entire crypto trade stack is now enterprise-grade, clean and compliant.

In June and July 2025 alone, ETFs recorded back-to-back weeks of $5 billion net buys. On July 10, BlackRock’s IBIT saw a single-day intake of $1.17 billion. Two days later, another $1.03 billion. 

Whales have begun noticing, and exiting. In the last 12 months, addresses holding more than 1,000 BTC have reduced their dominance to just 10.7% of total supply. That’s the lowest level since 2017. On-chain data shows that many of these whales have been distributing slowly and deliberately, often into accumulation addresses tied to ETFs or custodians.

Also this month, a dormant address dating back to 2010 moved 40,000 BTC worth $4.7 billion, onto Binance and Bybit. A few years ago, that dump would have cratered the market. In 2025, it barely made the second page of crypto news. Because the buyer most likely wasn’t retail, it was likely a composite of ETFs, family offices, and possibly dark pools.

Bitcoin slowly matured, or rather, the understanding of the market over Bitcoin has matured. Volatility has declined. Deribit’s volatility index is at two-year lows. Bid-ask spreads are tighter than ever. Exchange order books, once seen only by the in-betweens of panic and pump, are now calm, because the real trades are happening off-screen. And when they are visible on-chain, services like Arkham Intelligence have already mapped many of the institutional wallets. The public interest shown by institutional investors has made data much more appealing to retail investors.

Source: Deribit, TradingView

Even regulators have started to play along. In the US, Bitcoin has been formally classified as a commodity. In Europe, MiCA has brought legal clarity to fund structures. The GENIUS Act, signed in early 2025, opened the door for federal pensions to hold a limited BTC allocation through ETFs. Sovereign wealth funds in Singapore, Qatar, and the UAE are reportedly exploring direct purchases. The largest allocators in the world, alongside publicly traded companies, now considering the once impossible - who would’ve thought?

So, what now? At the baseline, we have a few scenarios at hand, following the massive surge into institutions:

• The base case is straightforward. If ETF flows persist, corporate treasuries continue to add, and macro conditions remain stable, Bitcoin will keep grinding higher, albeit slowly.
• The bear case is more ominous. If whales accelerate their selling beyond what ETF inflows can absorb, there could be a reversal. A 2% increase in liquid supply once drove a 70% crash. If institutional demand slows and retail is already exhausted, we could re-enter drawdown territory.

However, a third scenario may become a contingency if a new demand catalyst emerges, such as the US allowing full-scale pension allocation, or geopolitical chaos triggering capital flight; Bitcoin’s thin float could create a vertical move. Prices could spike not by 20% but by 100%. From $120K to $240K in weeks. Why? Because there’s simply no one left to sell. The supply is locked. The market has never been more illiquid at scale.

Coming back to it, we’re well aware of the truth. Bitcoin’s institutional transformation is both inevitable and irreversible. Originally seen by the institutions as a libertarian protocol is now a Wall Street asset class. The value is never-changing, however it does mean that the game has changed. 

A fun imagining would be to fast-forward a thousand years from now, and like the movie In Time, power structures quietly decide the flow of value behind the scenes. Everything feels efficient but also fleeting and inescapable. 

Maybe the Bitcoin story ends not with liberation, but with perfect integration.

But what’s your take? A new phase for the asset, or the new players? What’s clear is that more variables now shape its value. Capital flows, policy shifts, treasury decisions, and market structure all play a role - and stake something in it. Bitcoin has entered institutional systems openly. From here, it can only go more systemic.

The Sovereign Desk editorial is open for conversation. If you’ve observed notable flows, rumours, or data points that warrant attention, please reach out to us:

Dendi Suhubdy at [email protected]

Faisal Mujaddid at [email protected]

Looking to execute large crypto trades with precision, privacy, and zero slippage? Schedule a call with the team at t.me/dendisuhubdy or shoot us an email at [email protected]. Bitwyre’s OTC desk handles high-volume transactions with deep liquidity and bespoke settlement.

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