Bitcoin Updates: Institutional Funds Move: AI ETFs Gain Momentum Amid Growing Crypto Debt Issues

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Bitcoin Updates: Institutional Funds Move: AI ETFs Gain Momentum Amid Growing Crypto Debt Issues

Bitget-RWA2025/11/22 19:26

By:Bitget-RWA

- Bitcoin and Solana face renewed selling pressure as digital asset treasury companies (DATCos) offload holdings amid $42.7B corporate debt inflows into crypto. - DATCos, underwater on $126K Bitcoin peak investments, approach parity in market-to-net-asset-value ratios, triggering 40% Solana treasury value declines since October. - Institutional capital shifts toward AI ETFs (e.g., Global X AI ETF) as firms prioritize AI infrastructure investments over crypto, linking performance to tech stock volatility. -

The cryptocurrency sector is currently contending with a series of obstacles as

Bitcoin

(BTC) and

Solana

(SOL) encounter renewed downward pressure, following a $42.7 billion surge in corporate debt entering digital assets,

as reported by Benzinga

. Bitcoin, which recently dropped to $90,500—wiping out most of its gains for 2025—has been impacted by limited liquidity and compelled selling from digital asset treasury companies (DATCos), whose holdings are now deeply in the red. These DATCos, having made substantial crypto investments during Bitcoin’s climb to $126,000 last October, are now being forced to liquidate assets as their market-to-net-asset-value (mNAV) ratios near one-to-one. This has triggered a “forced selling” scenario at a time when demand is weak, intensifying the downward slide. For instance,

Solana-focused treasury firms have seen their net asset value drop by 40%

to $2.1 billion since October, leading management to consider selling crypto holdings to buy back shares. This situation is a stark contrast to the earlier enthusiasm for “corporate crypto adoption,” which has now become a challenge as companies rush to shore up their financials.

Bitcoin Updates: Institutional Funds Move: AI ETFs Gain Momentum Amid Growing Crypto Debt Issues image 0

At the same time, growing institutional interest in artificial intelligence (AI) is shifting investment patterns,

with funds such as the Global X AI ETF and WisdomTree's AI & Innovation Fund drawing significant inflows

as corporations ramp up spending on enterprise AI solutions. These ETFs, which include major players like

Nvidia

and

Microsoft

, are positioning investors to benefit from both the infrastructure and application sides of AI expansion. Nevertheless, their returns are still closely linked to overall market conditions and the volatility of large-cap technology stocks. For those seeking higher returns, mid-cap-focused options such as

WTAI

present greater growth opportunities, though they also carry increased risks due to uncertain earnings.

The dynamic between AI-related investments and the crypto market reveals a larger trend: institutional investors are increasingly diversifying across technology and digital assets. While DATCos are facing liquidity issues, AI ETFs are benefiting from the shift toward practical, large-scale AI implementation, especially in automation and cloud services. This divergence highlights the challenges of navigating a market where enthusiasm for technological innovation meets the constraints of debt-heavy corporate balance sheets.

With Bitcoin hovering around $90,000 and Solana’s treasury companies reevaluating their approaches, the future direction will hinge on whether crypto demand can recover in a tightening financial climate. For now, investors are monitoring how DATCos handle their finances and whether the capital flowing into AI can counterbalance the ongoing selling pressure in crypto.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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