10x Research: The decline in purchasing power of digital treasury companies and the selling of whales are limiting the rise of Bitcoin

 10x Research posted on the X platform that the significant consolidation of Bitcoin will not last forever. Bitcoin's performance is not driven by cycles, but rather by how much new capital enters the market to offset exiting funds. Unlike gold, the price of Bitcoin depends more on the net new demand for actual inflows of assets rather than interest rate expectations. Monitoring the supply and demand dynamics of Bitcoin provides a strong advantage for predicting the next direction of the market.

The current market narrative is mainly shaped by two dominant crypto themes, and since early summer this year, we have already taken the lead in grasping these two themes. The core theme is that Digital Asset Treasury companies are depleting their purchasing power, while the selling pressure from traditional holders temporarily limits the upward potential of Bitcoin.

We have long anticipated that Bitcoin's volatility will contract after the momentum brought by the GENIUS Act in the U.S. fades, allowing the market to enter an "air layer" during the summer recess of Congress. The slowdown in news flow is expected to suppress volatility, compress the net asset value of Bitcoin treasury companies, and limit aggressive stock sales and additional Bitcoin purchases by companies like MicroStrategy, naturally restricting the upward potential of Bitcoin. Our prediction that MicroStrategy would undergo a significant repricing relative to Bitcoin has come true, with its net asset value (NAV) compressed to only 1.2 times.

At the time of these analyses, digital asset treasury companies are still considered untouchable, praised by service provider research teams, and magnified by the media long before the market realizes the vulnerabilities we have identified. MicroStrategy now only purchases a few tens of millions of dollars at a time, not billions – a scale too small to convince investors that new funds are driving the next round of Bitcoin's rise.

The second narrative limiting the rise of Bitcoin is that the market has realized that traditional wallets are selling billions of dollars' worth of Bitcoin – essentially selling to meet ETF demand. We identified this dynamic early in our report "Who is Really Impacting Bitcoin Prices?" on June 20, 2025, followed by "How Smart Money Quietly Limits Bitcoin's Upside – How Traders Should Respond" on June 26, 2025, and "Just Moved $8.6 Billion of Dormant Bitcoin – What it Means and How to Trade" on July 5, 2025. It took the market some time to catch up with this narrative, but ultimately the drivers exhausted reasons to maintain bullish arguments.

Since June, our analysis shows that the selling volume of these traditional holders only matches the absorptive capacity of ETFs and new market funds, avoiding a market collapse but creating a new equilibrium. In this environment, Bitcoin's volatility is destined to decrease – the optimal strategy is to sell volatility, as prices are likely to remain range-bound.

Until recently, selling volatility has been one of the most profitable strategies over the past few months. Despite leveraged flash crashes, Bitcoin is still around $110,000.