Institutional Bitcoin Adoption in June 2021

Institutional Bitcoin holdings fell slightly from 1,631,150 BTC a month ago to 1,623,716 BTC today. Growth came from MicroStrategy, public Bitcoin miners, and Bitcoin lockups in DeFi and on the Lightning Network, but it was counteracted by institutional sellers like Block One and sales from various Bitcoin funds.

Slightly lower Bitcoin prices through late June and early July confirm these changes to institutional Bitcoin holdings, though there are important market forces that go beyond the few dozen institutions mentioned here.

For one, China's ban of Bitcoin mining wreaked havoc on all the Bitcoin miners in the region, forcing them to relocate or entirely shut down their operations.

The immediate effect of China's decision to shut down mining was a significant drop in mining difficulty on the Bitcoin network, but there are follow-on effects to Bitcoin's price that can't be ignored.

Chinese miners who found themselves in the difficult position of having to shut down operations likely had to sell coins in order to fund their overseas transition, and to compensate for the unexpected downtime of their mining machines.

Salaries, rent, and other expenses still need to be paid even when mining machines are offline.

In the last week or two, Bitcoin's hashrate has begun to climb, though it's too early to attribute the gains to any particular entity. As new hashrate continues to join the Bitcoin network, it may be a signal that miners are finding new homes outside of China, alleviating some sell pressure associated with machine downtime and machine migration expenses.

It could be a number of months before Bitcoin's hashrate returns to all-time highs, but in the meantime it will be easier for North American Bitcoin miners to accumulate coins at a lower cost.

Most of the largest public Bitcoin miners in North America are funding their operations with fiat debt (it's unclear whether this was happening in China to the same degree), so the extra Bitcoin they are mining right now will be added to their growing Bitcoin treasury balance.

In Bitfarms' latest production update, they said that 95% of the coins they mined so far in 2021 have been deposited directly into the company's treasury.

Another important change in the last month is the accelerating growth of Bitcoin moving onto the Lightning Network. In June, roughly 250 BTC was added to public Lightning Network capacity. That marks the largest inflow of Bitcoin onto public Lightning Network channels since early 2019, and total public Lightning Network capacity is up to 1,904 BTC today.

Together, the 54 entities below hold 1,623,716 BTC valued at roughly $49 billion at Bitcoin prices of $30,000.

Below is a full breakdown of the changes in institutional purchasing behavior for paying subscribers.