Bitcoin (BTC) recent 30% revisions have stirred up market sentiment, but Vaneck’s latest Outlook report suggests that pullbacks are part of a broader reset, rather than a sign of structural weakness.
In a recent report, Vanek said that while speculative demand is cooled, institutional adoption continues to expand, and changes in regulations could further strengthen Bitcoin’s role in global finance.
However, we noted that the current negative emotions are abnormal, as the corrections are in line with the previous bull cycle and are probably caused by the poor performance of the altcoin.
The report states that investors are waiting for the next catalyst to determine whether the market will regain momentum, compared it to sentiment in the months before the Bitcoin ETF was launched.
Institutional demand continues to be strong
The recession, when Bitcoin fell from its $109,000 peak from its January peak to a low of $76,500 on March 11th, coincided with its longest ETF leak streak since its inception. Over the past five weeks, Bitcoin ETF has seen a spill of about $6.4 billion, reflecting a pullback in risk appetite amidst economic uncertainty.
Futures funding rates have fallen to their lowest level since October 2023, indicating a significant reduction in leveraged strengths. Hedge funds primarily closed basic transactions, leading to tougher spreads and lower speculative activity.
Vanek emphasized that even if hedge funds rewind leveraged trades, companies are integrating Bitcoin into their balance sheets at an accelerated pace. It added that despite volatile market sentiments, the institutional Bitcoin strategy continues to grow.
The report highlighted that the Strategy (formerly the Micro Strategy) has continued to expand its Bitcoin financial strategy, obtaining 20,356 btc worth $19.9 billion and launching a $2 billion convertible note.
Meanwhile, other companies, including Metaplanet and Semler Scientific, are also expanding their Bitcoin-backed financial strategies.
Vanek also cited the introduction of Rex Equity Bitcoin Convertible Bond ETF as an indicator of increased demand for structured investment products related to Bitcoin’s Ministry of Finance.
Regulatory initiatives and adoption
Regulatory-wise, Bitcoin’s macroeconomic narrative continues to be strengthened both in the US and abroad as governments become more open to Bitcoin and digital assets.
The Trump administration’s decision to establish a strategic Bitcoin reserve shows a major change in how the US government views Bitcoin, indicating that it will treat it as a strategic asset rather than simply auctioning off seized holdings.
Senator Cynthia Ramis has reinforced the idea that Bitcoin is recognized as a financial asset held by the government and introduced legislation formalizing the National Bitcoin Reserve Strategy.
Internationally, the role of Bitcoin in trade and finance is expanding. Russia has begun settlement of oil transactions between China and India with Bitcoin. This is a move aimed at bypassing Western sanctions.
In Latin America and Europe, clarity of regulations has encouraged deeper institutional involvement, with Coinbase securing licenses for Argentina and Germany Bels and launching Bitcoin custody and payment services for institutional customers.
Bitcoin’s latest revision shows a cooling of speculative enthusiasm, but its long-term foundation remains intact, according to the report. Institutional strategies are mature, policy changes are creating new use cases and expanding the role of Bitcoin in global finance.
Vanek believes that the market is waiting for the next catalyst, including changes in monetary policy, the moves of the Ministry of Corporate Treasury and geopolitical development, to determine the direction of the next phase of the Bitcoin cycle.
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