Skittish risk managers could turn Bitcoin’s institutional boom into a bust, CEO warns
Bitcoin's significant rise in early 2024 due to institutional buying faces potential downside risk if market fatigue continues, according to Markus Thielen, CEO of 10x Research. October saw the largest liquidation event in crypto history, amplifying macroeconomic risks. Institutional investors, including spot Bitcoin ETFs, have been withdrawing, with $939 million in outflows recently. Bitcoin has underperformed compared to major assets like gold and technology stocks in 2025, with whales profit-taking above $100,000. While 10x Research remains cautious, they see shorting Ether as a better hedge than betting against Bitcoin, which still attracts institutional interest.
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Institutional Buying and Market Fatigue
The powerful wave of institutional buying that helped propel Bitcoin higher since early 2024 could also amplify a correction if market fatigue persists, according to Markus Thielen, CEO of 10x Research and a former portfolio manager. In an interview with Bloomberg, Thielen pointed out that the crypto market, particularly Bitcoin (BTC), is exhibiting signs of fatigue, following a challenging October marked by the largest liquidation event in the industry’s history. These losses, he noted, have exacerbated underlying macroeconomic risks that Bitcoin increasingly mirrors.
Institutional Inflows and Downside Risk
As institutional inflows, especially from spot Bitcoin exchange-traded funds (ETFs), have fueled the 2024 rally, Thielen warned that the same investor base might accelerate downside pressure if activity continues to decline. “At one point the risk manager may step in and say, ‘you need to eliminate or lighten your position,’” Thielen explained. He added, “There’s a risk that Bitcoin is going to continue to underperform because people need to rebalance their portfolios.”
Mounting Outflows from Bitcoin ETFs
The warning comes as US spot Bitcoin ETFs reported significant outflows. According to CoinShares, funds recorded a combined $939 million in withdrawals last week, signaling reduced interest from institutional investors. This marks a potential turning point for Bitcoin, as waning institutional appetite adds to the pressure on its performance.
Bitcoin’s Underperformance in 2025
In a surprising trend, Bitcoin has underperformed most major asset classes in 2025 — an atypical pattern for the year following its most recent halving. Despite achieving record highs like surpassing $126,000 in early October, Bitcoin has lagged behind gold, technology stocks, and several Asian equity indexes. Notably, Bitcoin is up over 8% year-to-date, while spot gold has risen by an impressive 57%. This divergence highlights the challenges Bitcoin faces amidst broader macroeconomic uncertainty. (Source: Curvo)
10x Research’s Stance on Bitcoin
Despite these concerns, Thielen’s 10x Research doesn’t hold an outright bearish view on Bitcoin. As Cointelegraph reports, the firm believes that shorting Ether (ETH) is a more effective hedge than betting against Bitcoin itself. Bitcoin continues to be the preferred cryptocurrency for institutional investors seeking market exposure.
Whales and Bitcoin Selling Pressure
Another factor contributing to Bitcoin's weakness is the activity of whales — large holders of the cryptocurrency. These whales have reportedly been taking profits above the $100,000 level. Alex Saunders from Citigroup told Bloomberg that the number of wallets holding more than 1,000 BTC has been gradually declining in recent weeks, adding further selling pressure to the market.