The capital game under the fluctuations of Bitcoin prices seems simple, but behind the apparent buying and selling lies two entirely different wealth logics.
In the past week, the cryptocurrency market has once again staged a dramatic scene: BitMine has purchased another 100,000 ETH, bringing their total holdings to 4 million; MicroStrategy has spent 1 billion dollars to increase their Bitcoin holdings, skyrocketing their total to 670,000, with an average cost reaching 75,000 dollars.
However, at the same time, Bitcoin prices have dropped to 85,000 dollars, and in the short term, these institutions seem to be 'trapped'.
On one side, publicly traded companies in the U.S. are frantically 'buying', while on the other side, retail investors and OGs (original players) are desperately 'selling'. In this capital showdown, who is the truly smart money?
01 The Bottom Line of Institutional Players: Why Buy More When Prices Drop?
When retail investors flee the market, institutional investors are increasing their cryptocurrency allocations like never before. Data shows that publicly listed companies currently hold about 660,000 Bitcoins, accounting for 3.3% of the total circulating supply, and this number continues to grow.
MicroStrategy has increased its Bitcoin holdings to 670,000, and Tesla holds over 11,500 Bitcoins. Even more surprisingly, Bitcoin whales (addresses holding 100-1,000 BTC) have become a dominant force in the market, currently holding about 5.16 million BTC, accounting for 26% of the circulating supply of Bitcoin.
The logic of institutional investment in cryptocurrencies has surpassed simple price speculation. Public companies are diversifying their assets by incorporating cryptocurrencies into their balance sheets and attracting investors who are optimistic about cryptocurrencies.
02 MicroStrategy's 'Bitcoin Alchemy': A Capital Game Verified by the Market
MicroStrategy is no longer just a software company; it has become a highly leveraged Bitcoin financial vehicle. Its stock price is highly sensitive to Bitcoin price movements, similar to a call option on Bitcoin.
MicroStrategy's capital operation model is extremely clever: it raises funds through an ATM (At-the-market) mechanism in the secondary market by issuing additional shares, as well as issuing convertible bonds and preferred stocks, then continues to purchase Bitcoin.
This model creates a self-reinforcing cycle: when Bitcoin rises, it boosts MicroStrategy's stock price, enabling it to finance at a higher premium and subsequently purchase more Bitcoin.
Currently, MicroStrategy's trading price reflects a premium of about 112% compared to the total value of its Bitcoin holdings and core business, indicating strong market expectations for its future ability to increase Bitcoin holdings.
03 The Real Game Under Market Volatility: Leverage Liquidation and Institutional Accumulation
The cryptocurrency market has recently experienced increased volatility, with over 110,000 people liquidated within 24 hours, totaling $509 million. This volatility is largely due to changes in market structure.
Current Bitcoin reserves on exchanges have dropped to 2.4 million, a new low in 12 years, with only 12% of the circulating supply available for trading. This liquidity crunch makes even small buy and sell orders capable of triggering significant price fluctuations.
While retail investors are struggling in the leverage game, giants are quietly positioning themselves. Blockchain analytics firm Arkham Intelligence found that SpaceX completed two large Bitcoin transfers totaling over $130 million in less than a week.
More importantly, Bitcoin spot ETFs have become the main channel for traditional institutions to enter the market. In the first week of October alone, U.S. Bitcoin spot ETFs recorded a net inflow of $3.2 billion, setting a new weekly inflow record for 2025.
04 Long-Term Trends vs. Short-Term Volatility: Who is the Real Smart Money?
Institutional investment cycles are fundamentally different from those of retail investors. Institutions usually have a 3-5 year investment cycle, while retail investors are more focused on short-term price fluctuations.
When asked, 'What phase are we in the cycle now?', nearly half of institutional investors believe we are currently in the late stages of a bull market, while only a quarter of retail investors share the same view. This cognitive difference is itself the sharpest scythe in the market.
Retail investment behavior is often driven by market sentiment. When the cryptocurrency fear and greed index is in the extreme fear range at 20, retail investors tend to sell, while institutions see long-term positioning opportunities.
What truly determines long-term returns is not short-term price fluctuations, but the scarcity of the asset itself and the adoption curve. A huge gap has emerged between Bitcoin issuance and demand, with institutional purchases now 7.4 times the new supply of coins.
Five years ago, when MicroStrategy began investing in Bitcoin, most people thought it was a crazy move. Today, the Bitcoin held by the company is worth over $40 billion. Those who once mocked this decision are now asking themselves a painful question: who is the real madman?
The market always shifts between a short-term voting machine and a long-term weighing machine. When the next cryptocurrency bull market arrives, you will find those institutions that were once 'stuck' sitting on a mountain of chips built from retail sell-offs.
True investment wisdom lies in the ability to endure short-term fluctuations in exchange for long-term returns. The market will always reward those who see through the surface and understand the essence of capital.
(This article represents personal views and does not constitute any investment advice. The cryptocurrency market is highly volatile, please invest rationally and pay attention to risk control.)
Who do you think will be the ultimate winner in the game between institutions and retail investors? Feel free to share your thoughts in the comments!
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