Asia Morning Briefing: A Cautionary Note on Bitcoin Treasury Demand

Key Highlights:

Companies investing in Bitcoin treasury are showing caution; the average purchase amounts have plummeted by 86% compared to previous highs in early 2025. This indicates potential liquidity challenges or diminishing confidence among investors.
In spite of reduced purchase sizes, 28 new treasury entities were established during July and August, collectively acquiring over 140,000 BTC, with Asia stepping up as a significant player in terms of digital asset treasuries.
Bitcoin’s value remains steady, fluctuating between $110K and $113K, bolstered by expectations of rate reductions from the Federal Reserve and an influx of institutional investments.

Good Morning, Asia. Today’s market insights:

Market Behavior:

Bitcoin treasury companies garnered attention at the recent BTC Asia conference in Hong Kong. Analytics show an unprecedented accumulation of BTC treasury holdings. However, CryptoQuant’s findings suggest firms are presently more circumspect regarding their investments.

The data indicates that treasury holdings of Bitcoin reached a total of 840,000 BTC this year, significantly boosted by the Strategy firm which holds 637,000 BTC. Nevertheless, the average transaction sizes have plummeted: Strategy acquired only 1,200 BTC in an August transaction, while other firms averaged at 343 BTC. This significant drop reflects a trend of smaller, more cautious buys, likely due to liquidity pressures or diminishing confidence.

Additional Market Notes:

The deviation in transaction volumes is notable. While transactional activity remains high with 53 transactions in June and 46 in August, the amounts involved are considerably less than in previous transactions. Strategy, for instance, secured 3,700 BTC in August, down from 134,000 BTC at its peak in the previous year.

This reduction in purchase average size may imply that while treasury companies are still engaged, they are hesitant to commit substantial amounts of capital, signalling cautious market sentiments and liquidity issues.

Concerns regarding the sustainability of Bitcoin’s current value are valid, as much of its growth in the second quarter was driven by significant accumulation from treasury companies. Institutional appetite for BTC currently shows a strong imbalance, absorbing over 3,100 BTC daily against only 450 being mined. This disparity stresses the critical role treasury firms have played in escalating Bitcoin’s pricing.

Despite these challenges, developments within the BTC Treasury sector continue. Reports indicate that 28 new treasury firms were created in July and August, collectively adding significant holdings of Bitcoin.

Moreover, Asia is positioning itself as a burgeoning hub for digital asset treasury companies, highlighted by Sora Ventures, a management firm from Taiwan, which has initiated a $1 billion Bitcoin treasury fund with an initial commitment of $200 million. This initiative is aimed at pooling institutional capital to bolster multiple new market entrants.

The primary question remains whether the influx from Asia can counterbalanced the restrained acquisition strategies of existing players and drive further Bitcoin adoption and price developments.