Bitcoin demand has been steadily falling since April, with recent data indicating it has now entered negative territory. According to an August 20 report by CryptoQuant, Bitcoin’s 30-day demand has dropped from a 496,000 BTC increase in April to a negative growth of 25,000 BTC, contributing to a notable drop in Bitcoin’s market value.
The report, provided by data analytics firm CryptoQuant, tracks demand trends from institutional investors, including spot exchange-traded funds (ETFs), and whale activity (addresses holding 1,000–10,000 BTC). While institutional demand is declining, long-term holders have been increasing their Bitcoin purchases.
The decline in Bitcoin demand began in April 2024 and has continued through the summer, reaching negative growth in mid-August. The report shows that institutional and whale interest has waned over this period, leading to a decrease in overall demand.
The price of Bitcoin has been impacted by the drop in demand, falling from around $70,000 in April to a low of $51,000 by early August. One key factor is a significant reduction in purchases by U.S.-based spot ETFs. Between August 11 and August 17, ETF purchases averaged 1,300 BTC, compared to 12,000 BTC in March. The price premium for Bitcoin trading on Coinbase has also fallen, dropping from 0.25% to 0.01%, indicating lower demand in the U.S. market.
Bitcoin’s price movements are closely tied to demand from both institutional and individual investors. The slowdown in spot ETF purchases is seen as a major contributor to the current downtrend. However, permanent Bitcoin holders—those who have never sold or spent their BTC—are taking advantage of lower prices, purchasing Bitcoin at a record rate of 391,000 BTC per month. Meanwhile, whales have reduced their holdings, with a 30-day percentage change in whale holdings dropping from 6% in February to just 1% in August.
The report notes that a recovery in spot ETF purchases will be critical for reversing the demand slump and potentially sparking a price rally. While institutional demand remains weak, the increased buying activity from long-term holders suggests continued confidence in Bitcoin’s future potential.
