This article first appeared on GuruFocus.

Bitcoin (BTC-USD) was supposed to have found stability through Wall Street’s embrace, but that narrative is starting to wobble. Purchases by digital-asset treasuries, once positioned as institutional anchors, have dropped sharplyfrom 64,000 Bitcoin in July to 12,600 in August and just 15,500 so far in September, according to CryptoQuant. That represents a 76% slide from summer’s peak and comes as Bitcoin has fallen nearly 6% in the past week alongside Ether. Shares in some of these treasuries, which previously tapped PIPE deals to raise billions, are now trading as much as 97% below their issue price, exposing fragilities that investors had hoped were behind the market.

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Valuations are compressing as well. The premium once paid above the value of Bitcoin reserves, measured by the market-cap-to-NAV multiple, has collapsed, bringing market values closer to the underlying assets. Markus Thielen of 10x Research highlighted that limited visibility into acquisition prices, share counts, and dilution from warrants is weighing on confidence, while regulators have begun probing unusual trading in treasury shares. Without their balance-sheet firepower, these treasuries have reduced their role as countercyclical buyers, removing an important support mechanism. Veteran trader Morten Christensen, who urged caution when Bitcoin hit $123,000, pointed to the surge of treasury activity as a potential top signal, underscoring the risks of over-reliance on institutional flows.

At the same time, retail demand has pushed in the opposite direction. The iShares Bitcoin Trust ETF attracted $2.5 billion in September, compared with $707 million in August, Bloomberg data shows. Derivatives markets, however, reflect more stress, with $275 million of Bitcoin longs liquidated in the past 24 hours. Jeff Dorman, chief investment officer at Arca, suggested the weakness could stem less from direct selling and more from the absence of a major buyer. The divergence between fading institutional participation and steady retail inflows could mark the beginning of a new phase for the crypto market, where the once-promised corporate safety net is giving way to a more fragmented demand picture.