The Structural Shift of the Digital Asset Market in an Extreme Geopolitical Context

First, we review Bitcoin's price movements amid recent geopolitical and economic shocks.

Bitcoin defied its "risk asset" classification as price rallied from 66000 USD to over 75000 USD three weeks into hostilities. Spot Bitcoin ETF data between Mar 02 and Mar 19 reflects net inflows totaling nearly 1.5 bln USD. Conversely, Gold (XAUUSD), the S&P 500 (US500), and the Nasdaq 100 (USTEC) faced significant selling pressure following the outbreak, recovering only on news of negotiations. Consequently, we examine the factors that allowed Bitcoin to decouple from traditional risk assets during this period.

How has the Bitcoin ownership structure changed to cause this different market reaction, and will it change market perception?

The surge in institutional ETFs and Long-Term Holders (LTH) has fundamentally restructured market behavior.

The composition of Bitcoin holders shifted significantly since late 2023 through Apr 2026. Spot ETFs and corporate treasuries increased their total share by 16%, while LTH grew by 10%. This expansion compressed the retail investor segment from 40% to 17% and reduced Short-Term Holders (STH)—traditionally the most active traders alongside ETFs—from 11% to just 4%. As corporate treasuries and LTHs frequently migrate assets to cold storage, the highly liquid market supply plummeted to approximately 14.7%. Excluding ETF custody holdings, this figure drops to just over 10%.

Furthermore, several corporate treasuries now utilize Bitcoin as a primary reserve asset; such as MicroStrategy and Metaplanet. Additionally, Tether maintains Bitcoin reserves to back issued assets like USDT, strengthening support levels.

These entities consistently buy the dip, providing more robust price support than in previous cycles. Specifically, MicroStrategy acquired an additional 22,337 BTC valued at 1.57 bln USD in mid-Mar, bringing total holdings to over 761,000 BTC—roughly 3.8% of the total circulating supply. With an average purchase price of approximately 75000 USD, this level represents a crucial structural floor for the market. Similarly, Japan’s Metaplanet raised 255 mln USD to increase Bitcoin reserves, reflecting a global trend of adopting digital assets to hedge against domestic currency devaluation. These maneuvers underscore corporate whale confidence in Bitcoin’s long-term trajectory, irrespective of short-term volatility driven by geopolitical conflict.

This transition confirms that institutional behavior, rather than retail activity, now dictates Bitcoin price action. Simultaneously, long-term retail sentiment has evolved as a larger portion of individual participants transition into the LTH category.

Regulatory Advancements Strengthening Investor Protection

Entering 2026, the US digital asset regulatory framework underwent a structural transformation following years of "regulation by enforcement." The SEC and CFTC jointly issued the Token Taxonomy in Mar 2026, confirming Bitcoin as a "digital commodity" under CFTC jurisdiction. This formalized a long-held market assumption with a definitive legal basis.

However, the framework remains incomplete. The CLARITY Act passed the House with a 294-134 vote but remains stalled in the Senate due to disputes over whether stablecoin issuers can pay yields to holders—a direct conflict of interest between traditional banks and crypto firms.

Nonetheless, the operational environment has changed dramatically. The SEC rescinded SAB 121, which previously prevented banks from acting as digital asset custodians, replacing it with SAB 122. This shift enabled major financial institutions to officially enter the custody space, driving the wave of institutional adoption reflected in the 2.8 mln BTC currently held in ETFs.

On-chain Data Indicates Attractive Pricing

The "Percentage of Supply in Profit" dropped to the 50–60% range. Historically, a decline toward 50% often signals a short-term market bottom—particularly after Bitcoin price plummeted nearly 50% from 124000 USD to 63000 USD in late Feb. The MVRV Z-Score also indicates that Bitcoin approaches a heavily undervalued zone, signaling a potential bottom.

Conclusion

The shift in holder demographics leads to declining exchange volume as assets migrate to cold storage for long-term holding. The growing influence of Bitcoin-focused investment firms acts as a price anchor, reducing drawdowns during periods of extreme market volatility. On-chain data suggests current price levels remain attractive for long-term accumulation; furthermore, "whales" are increasing positions around the 60000 USD mark, making further deep declines unlikely in the near term.

Regarding the Bitcoin risk profile: fundamentally, the core outlook remains consistent despite high institutional and long-term ownership. Bitcoin price may still fluctuate based on M2 money supply growth and broader global economic risks.